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Digital Banking Vital to Financial Inclusion in Nigeria—Segun Agbaje

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By Dipo Olowookere

Managing Director of Guaranty Trust Bank (GTBank), Mr Segun Agbaje, has emphasised the importance of digital banking in the growth of financial inclusion in Nigeria.

Mr Agbaje, speaking to World Finance, lamented that “there are so many people in Africa who are outside the banking system.”

He submitted that “for you to be part of organised society, financial inclusion is a must.”

GTBank, one of the continent’s leading financial institutions, is a big player in the mobile banking world, which is why it boasts of several customers.

The growth of financial institution is very slow in Africa, but it is predicted to rise.

“It’s not as superfast as we would like it to be, but there are marked improvements, and this is steadily increasing”, said Mr Agbaje, pointing out that, “Just 10 years ago, data on financial inclusion was hard to come by. Now we know just how much better we must do in order to expand access to financial services.”

But the Central Bank of Nigeria (CBN) has predicted that by 2020, the number of adult Nigerians with access to payment services will increase to around 70 percent.

Access to savings, credit, insurance and pensions is also growing rapidly.

“Encouraging as these projections are, we know that there’s a lot more to be done. This is why, at GTBank, we are keen to leverage digital technology to expand the reach of our products and services. Mobile has become very, very big and we have begun to see people doing a lot using their mobile phones.”

Mr Agbaje points to the example of Kenya’s M-Pesa, a mobile-based money transfer and finance platform that is now used by more than two thirds of the country’s adult population. The mobile app serves as a channel for approximately 25 percent of Kenya’s GNP. “When I look at our mobile technology compared to a lot of developed economies, I think we’re a lot further ahead. You know, I actually think that the African banking sector is very much ahead in terms of mobile banking. And I think African banks are probably embracing disruptive technologies a lot quicker, because we don’t have as many legacies.”

Making banking more mobile

This readiness to embrace new technologies has helped a large proportion of the African population skip whole stages of traditional digital development altogether. Indeed, for many, a smartphone is their first computer. Agbaje said: “From experience, we know that the major reasons for financial exclusion include the lack of physical access to financial institutions, inadequate understanding of financial institutions and their products, general distrust in the system, and the affordability of products as a result of minimum opening balance requirements.”

Despite these hurdles, technology is helping forward-thinking institutions tackle such challenges head on, prompting financial inclusion to leap forward on the African continent.

Mr Agbaje explained that, “The world is changing around us and the future of banking is digital. To protect our traditional business and maintain our social relevance, we are incorporating another model, which involves mobile phones, use of data, partnerships and collaborations. Simply put, we are creating a platform to support our traditional business model by leveraging digital solutions.”

GTBank’s Bank 737 provides banking services to millions of Nigerian mobile phone owners, and does not require internet access to perform basic banking services. Anyone with a phone registered in Nigeria can open an account, transfer money, buy airtime or check their balance by dialling *737#. The convenience of Bank 737 lies in the fact that all of its services can be accessed through a customer’s mobile phone, at the dial of *737#. And because stable internet access is still not ubiquitous in Africa, Bank 737, being USSD-powered, side steps the need for an internet connection.

“Through this service, which makes banking simpler, cheaper and faster, we continue to pull into the banking stream many of those who have long been excluded from the country’s financial framework,” said Mr Agbaje. “Since its introduction, we have recorded an uptake of over three million customers and over N1 trillion [$3.1 billion] in transactions via the platform.

The reception of Bank 737 has been phenomenal, with it gaining recognition as Product of the Year in Africa from The Asian Banker and Best Digital Bank in Africa from Euromoney. The bank was also the recipient of six awards at the 2017 Electronic Payment Incentive Scheme Awards, which was organised by the Central Bank of Nigeria in conjunction with the Nigeria Interbank Settlement System to recognise financial institutions, merchants and other stakeholders at the forefront of driving electronic payments in Nigeria.”

Digitally minded

“Core to our digital strategy is both our understanding that the future of banking is digital, and our determination to lead that future”, Mr Agbaje said. “We know, because digital technologies have dissolved the boundaries between industry sectors, that our competition is no longer just banks. It now includes fintechs, telcos and tech companies that can provide speed and flexibility to customers as we can. This creates tough challenges for the banking sector, but it also creates ample opportunities to extend our footprint.”

A readiness to embrace new technologies has helped large portions of the African population skip whole stages of traditional digital development altogether

For example, the bank’s SME MarketHub is an e-commerce platform that allows business owners to create online stores.

Mr Agbaje told World Finance: “Our strategy is to take advantage of the new opportunities born from the digital revolution by moving beyond our traditional role as enablers of financial transactions and providers of financial products, to playing a deeper role in the digital and commercial lives of our customers. In pursuit of this strategy we have created our own in-house fintech division, while also actively seeking partnerships and collaborations with other fintechs.

“Our immediate focus is three-pronged; to digitalise our key processes, build a robust data-gathering infrastructure, and create a well-designed, segmented and integrated customer experience, rather than a one-size-fits-all distribution. In the long run, our goal is to build a digital bank that consistently delivers faster, cheaper and better solutions for the constantly evolving needs of our customers.”

The lack of digital and electrical infrastructure, as well as lower levels of wealth than those found in more developed markets, means that there are some barriers to the full adoption of digital banking that are particular to Africa. “Another obvious challenge is the little focus given to innovation in the banking industry.

African banks, like most banks across the world, tend to innovate in bite sizes, and generally around products, rather than service delivery. It was almost as though banks believed that ownership of the customer was their right, as long as they had the branch network to support customer footfall. Now, facing the real threat of losing relevance, banks are waking up to this need to innovate – not just out of dire necessity, but as a strategic objective.”

Mr Agbaje also pointed out that, while GTBank has made significant gains in getting customers to accept digital banking as a viable alternative to traditional forms, there is still more to be done. That said, he is hopeful that the Central Bank of Nigeria’s ‘Cash-less Nigeria’ policy, which discourages the use of cash, will drive greater migration to e-banking platforms.

“We are also tackling the innovation challenge. We now operate an open innovation policy, through which we invest significantly in building our in-house digital capabilities. At the same time, we are seeking effective partnerships and alliances to drive operational efficiency and boost our competitive advantage.

“We want to become a fully digital bank that offers everyday banking services outside of traditional bank walls, but more than that, we want to create digital touch points that ensure we are constantly interacting and playing a deep role in the lives our customers. This of course requires a sustained commitment, and we have repositioned our business structures in such a way that makes us very confident in our continued leadership of Africa’s digital frontier.”

Gaining interest

Despite the difficult business environment in 2016, GTBank enjoyed “a fairly decent year”, according to Mr Agbaje. The bank overcame these challenges by growing its retail business and leveraging technology to deliver superior payment solutions to make banking simpler, faster and better. Gross earnings for the period grew by 37 percent to NGN 414.62bn ($1.3bn), from NGN 301.85bn ($959m) in December 2015.

This was driven primarily by growth in interest income, as well as foreign exchange income. Profit before tax stood at NGN 165.14bn ($524.7m), representing a growth of 37 percent since December 2015. The bank’s loan book also grew 16 percent, from the NGN 1.37trn ($4.4bn) recorded in December 2015 to NGN 1.59trn ($5.1bn) in December 2016, with corresponding growth in total deposits increasing 29 percent, to NGN 2.11trn ($6.7bn).

Likewise, the bank’s balance sheet remained strong with a 19.7 percent growth in total assets and contingents, reaching NGN 3.70trn ($11.8bn) at the end of December 2016, while shareholders’ funds reached NGN 504.9bn ($1.6bn). The bank’s non-performing loans remained low at 3.29 percent – below the regulatory threshold of 3.66 percent, with adequate coverage of 131.79 percent. Against the backdrop of this result, return on equity (ROE) and return on assets closed at 35.96 percent and 5.85 percent respectively.

According to Mr Agbaje, “The vision of the bank is to build an oasis in a country that was not necessarily known for doing things properly, so we focused on ethics and integrity. And once you build anything on that type of foundation – because even though things change, values never change – and bring in very young people who imbibe this culture along with a healthy attitude towards work, you have a workforce that’s very young and dynamic, possessing all the right values to enable you to build a successful organisation.”

Pan-African

GTBank is building on its successes both at home and abroad through its ‘Pan-African’ growth strategy. Apart from its home market in Nigeria, the bank enjoys a presence in three countries in east Africa (Kenya, Rwanda and Uganda), five in the west (Ivory Coast, Gambia, Ghana, Liberia and Sierra Leone) and has plans to have another in Tanzania by the end of the year. “Our strategy has always been to go into a country and take the high end of the middle market, and then as we grow, enter into the corporate markets.

“We are building a high-end type retail business because the middle class is emerging in most countries in Africa, and where you have an emerging middle class, you have a lot of banking opportunities. So far, we have been fairly successful, delivering an ROE after tax of over 25 percent.”

The bank’s expansion strategy has enjoyed remarkable success, with businesses outside Nigeria now accounting for 15 percent of total deposits, 11 percent of its loans and around 8.2 percent of its profit. Over the next three years, Mr Agbaje expects subsidiary contribution to grow further, to approximately 20 percent.

He told World Finance: “I’m pretty excited about the fact that the profit of the bank has grown by over 300 percent in the last five years. Our customer base has grown from around two million to over 10 million, and we have built a very strong e-business as well.

“We are driven by a vision to create a great African institution; an institution that can compete anywhere in the world in terms of good corporate governance culture and performance. We are driven by the desire to be, in terms of best practices, as good as any institution in the world. As a bank, we always want to do better than 25 percent ROE, and if we have the corporate governance that you’d find anywhere else in the world, then we’ll always be an attractive destination for discerning international investors.”

World Finance

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Advans Nigeria Appoints Odetayo as Deputy Chief Executive Officer

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Elizabeth Odetayo

By Modupe Gbadeyanka

To improve operational efficiency, Advans La Fayette Microfinance Bank has appointed Mrs Elizabeth Odetayo as the new Deputy Chief Executive Officer.

She will work closely with the Chief Executive Officer, Mr Gaetan Debuchy, and the executive team to drive the bank’s strategic initiatives, optimize operational performance, and expand its reach to empower more individuals and businesses with access to tailored financial solutions.

Before her new appointment, she served as the Chief Financial Officer (CFO) of Advans La Fayette Microfinance, where she played a pivotal role in shaping the bank’s financial strategy, ensuring robust fiscal management, and supporting its mission to provide inclusive financial services to underserved communities.

A statement from the financial institution disclosed that the appointment of Mrs Odetayo became effective Saturday, February 1, 2025.

She is expected to bring her over 20 years of wealth of experience and a proven track record of excellence in the financial services sector to her new role.

“This strategic appointment underscores the bank’s commitment to fostering leadership from within and strengthening its executive team to drive continued growth and innovation,” a part of the statement read.

Mrs Odetayo has demonstrated exceptional leadership, strategic vision, and a deep understanding of the microfinance industry.

Her expertise in financial management, risk assessment, and operational efficiency has been instrumental in advancing the bank’s objectives and enhancing its impact on clients and stakeholders.

Commenting on the appointment, Mr Debuchy said, “Elizabeth’s appointment as Deputy CEO is a testament to her dedication, expertise, and outstanding contributions to our bank.

“Her deep understanding of our operations and her commitment to our mission position her to help steer the bank toward achieving its strategic goals.

“We are confident that her leadership will further strengthen our ability to deliver impactful financial services to our clients.”

In her reaction, Mrs Odetayo said, “I am honored to take on this new responsibility and to continue contributing to the growth and success of the bank.

“I look forward to collaborating with our talented team to drive innovation, enhance customer experience, and expand our reach to create lasting value for the communities we serve.”

Advans La Fayette Microfinance remains committed to its mission of fostering financial inclusion and empowering individuals and businesses through accessible and sustainable financial solutions.

The appointment of Mrs Odetayo as DCEO marks an exciting new chapter in the bank’s journey toward achieving its vision.

Her promotion and over 130 staff in 2024 is a demonstration of the bank’s commitment to empowering its employees, fostering a culture of excellence, and driving productivity against all odds. By investing in internal talent, Advans continues to build a strong, motivated workforce that is equipped to deliver on its mission and vision.

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NIBSS Upgrades NQR Payment to Reduce Cash Dependency

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NQR payment

By Adedapo Adesanya

The Nigeria Inter-Bank Settlement System (NIBSS) has unveiled significant upgrades to its Nigeria Quick Response (NQR) payment system.

The mechanism is designed to reduce cash dependency and streamline and enhance digital transactions for businesses and individuals across Nigeria.

The NQR payment system, launched in March 2021, is part of Nigeria’s broader push to promote cashless transactions across the country.

The system allows customers to make payments by scanning a QR code, which redirects them to their bank or mobile wallet to complete the payment. It is also timely and avoids delays.

Speaking on the development, Mr Premier Oiwoh, MD/CEO of NIBSS, emphasized the evolving capabilities of NQR and how it is poised to revolutionize payments, transactions are processed instantly, ensuring immediate settlement.

“This account is the only QR in the world that is instant for the beneficiary,” he said.

He noted that the system is also far more robust, offering smoother and more secure transactions. It now supports both Person-to-Person (P2P) and Entity-to-Person (E2P) payments, significantly expanding its use cases.

“Beyond the P2P, there is also E2P on the MQR, and most of the bank apps have it today.

“My dream is to have hawkers on the streets being able to present their QR in the form of an ID card and then make payment. Cash cannot be everywhere, what we are all looking for is payment” he said.

“You can also send your personal QR code to anybody to pay you rather than send an account number,” he said

Mr Oiwoh announced that a new pricing structure for NQR payment will take effect on March 1, 2021.

The use of QR codes is expected to significantly reduce Nigerians heavy reliance on cash, thereby contributing to the digital economy infrastructure and financial inclusion agenda of the Central Bank of Nigeria (CBN).

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UBA Resolves ‘Transfers to Other Banks’ Glitch on Mobile Banking App

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UBA Mobile Banking App

By Aduragbemi Omiyale

The United Bank for Africa (UBA) Plc has restored full service to its mobile banking app after some customers experienced difficulties completing financial transactions from the platform.

Business Post reports that earlier, some UBA customers could not make fund transfers to other financial institutions from the mobile app.

The lender quickly swung into action to resolve the issue and has fully restored its mobile banking app service, with customers now able to send funds to other banks via the platform.

Confirming this development, the bank, in a notice to customers on Thursday afternoon, said, “We are pleased to inform you that the transfers to other banks service has been restored on the UBA Mobile Banking App.

“We sincerely apologise for any inconvenience this may have caused and reassure you of our commitment to continuously improve our services.”

While thanking them for their patience and understanding, UBA advised any customer still experiencing “any further issues [to] please contact our CFC support team.”

“For enquiries, please contact our 24-hour Customer Fulfilment Centre (CFC) on 02012808822 or send us an email at [email protected],” the message said.

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