FINANCE FOR ALL WHATS NEXT

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FINANCE FOR ALLWHATS NEXT HOW TO GET THERE

• PRESENTATION BY
• MR. ALBERT ESSIEN
• REGIONAL DIRECTOR FOR WAMZ, EAST SOUTHERN
  AFRICA
• ECOBANK TRANSNATIONAL INCORPORATED

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CURRENT STRUCTURE

• The African banking sector has seen some
  governmental
• reform however bottlenecks still exist
• More focus on government and large corporates
• Low banking penetration
• Lack of adequate branch infrastructure
• Neglect of SME sector
• Lack of adaptable products for informal SME
  sector
• Affordability of minimum deposit requirements
• High cost of finance

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CURRENT STRUCTURE

• Low level of competition
• Cash orientation of markets
• Remoteness of communities
• Ineffective or absence of national individual
  identification systems
• Lack of verifiable address systems
• Lack of depth in financial intermediation
• Limited coverage of products

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HOW ECOBANK HAS ADDRESSED THESE CHALLENGES

• EXPANDING OUR REACH TO IMPROVE ACCESS Two
  pronged approach channels and products
• Strategic focus on Retail Banking
• Aggressive network expansion across the group
  through brick and mortar, ATMs, Kiosks, Direct
  Sales Agents strategic alliances
• Ecobank currently in 18 countries, with over 300
  branches in West and Central Africa
• Will be in 25 countries in Middle Africa by 2009
  with 1000 branches
• Provision of convenient, accessible and reliable
  banking and banking and financial products and
  services
• Focus on liability generation and transaction
  banking
• STRATEGIC ALLIANCES
• Partnership with ACCION on microfinance
• Partnership with AMADEUS to use their channels to
  sell banks liability products
• Partnership with WESTERN UNION
• Other local partnerships such as EBGs alliance
  with TRANSOL

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HOW ECOBANK HAS ADDRESSED THESE CHALLENGES

• IMPROVING EFFICIENCY TO REDUCE COST
• Setting up an efficient and reliable shared
  technology platform to deliver cost-effective
  services across the Group
• This will be the first of its kind in West Africa
• SHIFT FROM GOVT/LARGE CORPORATES TO SME SECTOR
• Retail banking desks in all affiliates to cater
  to the needs of SMEs and individuals
• Structured product programs for SME sector
  distributorship financing, inventory financing,
  receivables financing, warehouse financing etc
• Partnering with relevant agencies to provide
  training and other support for SMEs
• Locally developed debt rating model focusing on
  limited disclosures common to African SMEs
• Working with Moodys to develop a West Africa
  specific database to be used to rate local
  corporates

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HOW ECOBANK HAS ADDRESSED THESE CHALLENGES

• ADAPTABLE PRODUCTS FOR SME/CONSUMER CLIENTS
• Introduction of customised Product Programs with
  local flavour to speed up credit delivery
• Group Guarantee schemes lending to Tomato
  farmers who guarantee each other
• Guarantees from government and other donor
  agencies in supporting SME credits
• Liability products with affordable minimum
  deposit requirements e.g. savings product
• Mortgage financing
• Lease financing

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HOW ECOBANK HAS ADDRESSED THESE CHALLENGES

• ADAPTABLE PRODUCTS FOR SME/CONSUMER CLIENTS
• Non financial based indicators in assessing
  client risk profile and suitability for credit
  expansion
• Collaboration with Susu collectors who have
  in-depth knowledge local communities and help
  reduce loan defaults
• Electronic products ATM cards, payroll cards,
  gift cards, travel cards, credit cards, debit
  cards, internet banking
• Telephone/Mobile phone banking to be rolled out
  in the near future

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STEPS TO FURTHER ENHANCE ACCESS BANKS

• Need to tap into the vast potential that exists
  in large informal sector
• This will require
• - new products
• - revised documentation requirements
• - re-look at minimum deposit requirements
• e.g. Mzansi product in South Africa
• - new channels e.g corner shops, fuel stations,
  pharmacies
• - The African flavour product branding,
  signage for branches, use of local people,
  ambience in banking halls, dress code etc
• Provision of shared infrastructure in rural areas
  to be spearheaded by banking sector as part of
  corporate social responsibility
• The Challenge is to THINK GLOBAL BUT ACT LOCAL
• How do we build African banking institutions that
  meet world class standards and portray our
  African-ness?
• How do we formalise the informal?

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STEPS TO FURTHER ENHANCE ACCESS GOVERNMENTS

• Implementation of National ID system
• Transformation of Land tenure system
• Improving ICT
• Provision of legislative, administrative and
  funding support to network of community based
  banks to provide points for delivery of banking
  services to rural communities
• Improve investment climate to encourage more
  banks will ginger competition
• Use of tax incentives to redirect lending to
  targeted areas and also to encourage project
  financing

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STEPS TO FURTHER ENHANCE ACCESS DEVELOPMENT
PARTNERS

• Need to forge partnerships with banking sector
• Investment in infrastructure development
  telecommunications
• Provision of medium to long term financing for
  on-lending
• Technical expertise to bridge skills gap in
  banking industry

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CONCLUDING THOUGHTS

• Every morning a gazelle wakes up, it knows it
  must run faster than the fastest lion or it will
  be killed.
• Every morning a lion wakes up, it knows it must
  outrun the slowest gazelle or it will starve to
  death.
• It does not matter whether you are a lion or
  gazelle, when the sun comes up, you better start
  running.

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• THANK YOU