Home Finance Banks fail when they consume the resources of other stakeholders

Banks fail when they consume the resources of other stakeholders

by Business News Report

By Omoh Gabriel

Last week, the Group Managing Director of Access Bank, Mr. Aigboje Aig-Imokhuede had an interactive session with journalists in Lagos. He explained the philosophy that will move the bank forward which is all about sustainability. It was also an opportunity for him to grant his first ever interview as the CEO of Access Bank since becoming the Managing Director. The discussions lasted for two hours.

The purpose of the interaction actually for me goes beyond talking about the combination of Access Bank and Intercontinental Bank. I think it is an opportunity for me to share with you our thoughts around a major principle of philosophy which underpins how Access Bank operates today which will drive the way and manner Intercontinental will be run as a subsidiary of Access Bank and when the two banks merge into one, or when Access Bank absorbs Intercontinental Bank.

What has sustained Access Bank thus far?
Well, this business of banking is the only thing I have done as a professional. At the very early point of my career, I was very much focused on banking laws, but three years thereafter, I moved from the legal function to what we called the core banking functions when I moved to Guaranty Trust Bank PLC, and I started off by running what we called consumer banking at that time.

In the Nigerian banking terrain, one thing has been constant and that is the fact that the mortality rate of banks in Nigeria and worldwide is very high. In the USA, one or two banks a day actually fold up. When I think of the institutions that existed in banking when I joined the industry, clearly, they were staffed by very accomplished bankers, they had capital, liquidity, at least to start with but if you look at it today, over 20 years ago about 120 banks have gone under as a result of government policy, and, therefore, as a senior stakeholder in the industry, if you are not operating with a paranoid of fear, that your institution may find itself among those which no longer exist, you must be very naïve. The Lehman brothers have done and said it all, and the type of thing happening in Europe now attests to the fact that anybody can cease to exist.
So, intuitively, I have always operated under the fear of possible failure, intuitively, that has been my management style.

Who were those that influenced your career at the early days?
Now if I look at the formative period of the management of my career, my greatest influence as a thinker and a manager and my mentor is the gentleman called Fola Adeola. Fola Adeola’s philosophy which was also shared by the late Tayo Aderinokun, was that “if you do it well, it will be well with you.” Yes, in a way, this was just a simple expression around the core of sustainability. This implies you must be in positive equilibrium with your environment, and your environment would sustain you.
And so coming into Access Bank, we founded our value around “Doing It Well” and at that time, we expressed the value in terms of ethic, passion for excellence, passion for our customers, continuous learning and things like that.

What were your aspirations post-consolidation?
When we did our merger in 2005, and thereafter, we pursued significant capital increase in 2006, 2007, I asked myself, well, okay, Nigerian banks have scaled up in capital, and a very strong entrepreneurial spirit has powered the growth of the industry, we have well trained employees, a strong macro economic situation in the country, I asked myself does this mean Nigerian banks will not fail? Remember we started at 140 when my career started, and by 2005 we were 25, does it mean these 25 banks will not fail? And I said to myself, if I look back in history, capital, skill, branding and all of those things are good but they are not a guarantee against failure.

I asked again, what is it a company must do to position itself comfortably in such a manner that it is here for good and for the future? I started to research and to read and I discovered that benchmarking is the solution, bearing in mind companies that have been around for 100 years, particularly banks. Thus, I learnt more and more about the concept of sustainability, and simply put, companies that are in harmony with their host community, when I talk about host community, I did not mean places like Niger-Delta host community. If you are in Nigeria, that is a host community. If you operate in Edo State, that is your host community and if you operate across the whole world, the entire globe is your host community, and those that maintain that harmony are the companies that survive year-in-year-out. They may change name, management and shareholding, combined left and right, so how do we achieve this harmony?

Why do companies fail, particularly banks?
The reason is that in our quest to provide service, in our quest to make profit, guess what we do? We consume the resources of several stakeholders. Whose resources do we consume? We consume the licence that gives us the privilege to take money that is not ours and give it to people who are different from the people whom we took the money from on the understanding that when those people who gave us the money want their money back, it is going to be there. Let us say all of us in this room, once you are given a licence, irrespective of who we are and where we came from, whatever our background, if you are given a licence, once you put that thing, Bank, on the door, it means we have the privilege for people to walk in there and deposit money. They would drop the money and go.

It means that they trust you and when they come back they will get the money. So we consume the licence and the deposits of those who put their money in the bank. We consume the energies of our staff, we consume the effort of those who borrowed from us and in the strict sense of a profit-making organisation, we convert this to profit. Now from the capitalist standpoint, whether we make loss or profit, we should survive. However, what the world has shown, even if you make profit, if you consume recklessly, those whose resources you are consuming will hold you accountable whether it is banking, oil and gas, and so on.

Is that why many banks failed in Nigeria?
I think there is no greater lessons than the events between 2007 -2011, the banks that didn’t survive were simply those who were the most reckless consumers of the resources of the economic system and they were then destroyed by a backlash in the economic system, and how did the backlash take place? If it is the licence that is consumed recklessly, we have a regulator from government that would come in, fine you and penalize you and punish you, and if it is the customer, you will have a run on the bank because they will demand for their deposit back. If it is your staff, they will protest and leave and become unproductive.
And so, it is in the self interest of any organisation that wants to protect its operation to understand its position in the community and bring itself in harmony with the community. I speak now of sustainability in this manner having learnt in 2007, we didn’t have this depth of understanding.

What steps did you take having learnt these lessons?
What did we start doing then? We started first by setting a corporate social responsibility agenda, and we brought in somebody from Cadbury because Cadbury has a very strong sustainability record, and learning some of the process and networking with international organisations, particularly banks. One bank that I admire is Standard Chartered whose global CEO, has done a marvelous job and you can see it in the performance of the bank.
By 2010, we found our sweet spot in sustainability, and we crafted our sustainability agenda. Our sustainability agenda revolves basically around three things: leadership, innovation and empowerment. Before I go into leadership, innovation and empowerment, let me tell you something very important:

My banking career has also spanned a very interesting time, for the Nigerian economic system. It was up till 1999, done under a military regime. Irrespective of how we see it, the Nigerian economy operated a closed/command structure up till 1999. And that is one of the key reasons why aside from the fact that the military are rarely good for economy, yet the macro-economic indicators of Nigeria were not interesting.

With Obasanjo’s emergence as President and the democracy dividends, we saw the opening up of the Nigerian economy and between 1999 and 2005, the Nigerian economy witnessed significant growth simply on the back of opening up of a repressed economy, and so we had growth rates that were very robust, and fortunately, before the world knew that we had a robust growth rate, Obasanjo engineered debt buy-back, and so we had very little debt at the point in time that we had the significant growth rate, and, therefore, we had the benefit of a very strong reserved position as a country. So, we started seeing macro-economic stability for the very first time in a long time.
By the way, the funny thing about democracy is that several other African countries enjoy these benefits just by democratising and we took advantage of it. Nigeria is a phenomenon of a repressed economy opening up.
But what we saw and we took advantage of in 2001, we discerned that if we had to pursue this entrepreneurial dream of crafting our own banking model and offering it to the public, we had to do it at the strictest point of economic growth. And our timing was fortunate because we got into Access Bank at a time when the Nigerian economy was growing at a GDP rate of 6-7 per cent.

In 2007, a realisation hit us. The Nigerian economy was thriving because it was repressed, it was let go, and it started to blossom. But the economic structure had favoured the corporate and not the consumer, the operator and not the user of the service. This is how things happened in a repressed economy. To illustrate, if you don’t have phone, the day you have access to it irrespective of how you have access to it, you grab it.

It is similar to the Nigerian economy. Now that we have seen a change, and what was that change? By then, we had a population size of 150 million, young, urban population. When you have a base of 150 million populations growing at a rate of two per cent, you have created the most exciting consumer market. And with globalization and communication, that consumer market has a desire to spend, to educate itself, to live and enjoy itself, and if you can provide services to that market you will become like Wal-Mart in the USA and the great banks, and we said to ourselves, a corporate institution like Access Bank has to begin to reposition itself in this consumer market. This thought, that we had in 2007 which is proving true in 2011, I shared it with the staff of Intercontinental recently.
You can quote me on this. There is no more evident expression of the power of the Nigerian consumer market than the fact that just a few days ago, David Cameron said in his party address, which he wanted to use as a way to galvanise the British people in the context of the global financial crisis and its effect on the UK and he told them to wake up and seize the moment and create a new entrepreneurial energy and consumer society in the UK. Just like… Did you know where he mentioned? He actually mentioned Lagos, Nigeria.

That happened when he just got back from Lagos. When I went to Hong-Kong, I could see the economy moving on the road. You could feel it, the power of the economy and that is what happened when he came. Based on this, we said no, we have to change our model. We recognised that the corporate is key but we need the consumer. The power is shifting to the consumer and if you can capture a share of the consumer, in terms of profit, that is why MTN today is the real winner in the GSM and telecom sectors. They came to Nigeria and they saw the opportunity at a time when others were not just sure but MTN saw the population number. Today, they control 40 million subscribers in Nigeria and in the next ten years, they may have 80 million subscribers. And that is the power. I want you to think of an Access Bank with 25 million customers. I want you to think of an Access Bank with 40 million customer base.

Access Bank is a smaller bank going for a bigger bank, what is the rationale?
First of all, if you look statistically in mergers and acquisition, for them to work, those that work, very rarely are they of equal size. It means the reasons behind the combination is probably less value-oriented, maybe the strength, incentives, ego, And I will tell you why it is easier for Access Bank and Intercontinental Bank to combine than for First Bank and UBA to combine. They have many reasons why not to do it. They have many things to lose. There is so much of value distortions unless they are compelled, say for instance, somebody is coming from outside Nigeria to destroy them, and they feel the only way to survive is to combine.

Intercontinental, in terms of assets combination was actually smaller than Access Bank. Our total asset was about 1.1 trillion naira while Intercontinental Bank was about N800.7 billion. So, if it is pocket, our own pocket is bigger. Most importantly, in terms of capital, liquidity, and efficiency issue that denote which is stronger than the other, obviously, we are stronger. So the size issue is in terms of number of branches, staff, and customers, and of course, if you have branches, staff and customers, you are much more visible than somebody who has a limited number of that. In 2009, remember that there was an audit; as a result, eight banks were affected. When the audit result came out, and I know there is no where on earth if the central bank goes and examines a bank and they say the capital is wiped out, I know that the news is bad. So I said to myself: 30 per cent of the Nigerian banks have had a very terrible accident. I said we had a very big problem. I also realised that this accident was being revealed through stress tests. This has happened at various times.

In Asia, the accident was worse. It affected 70 per cent of their banking system. If you look at Access Bank from the beginning, we said we would grow organically and inorganically, and in one of my presentations to the media and to the world, I said one of our strong competencies is merger and acquisition.
I went abroad for two weeks. I studied the Asian financial crisis, the USSR, and the current crisis in the U.S and the ones taking place in Europe, and I realised something that when you have a banking crisis, the set of options that are available to a country are known. In each country, the style or option they picked did not differ. So I knew within me that Nigeria has the same set of options. When I came back, I called our Board together and we had a retreat. I gave them the result of the study and I told them I have found something out. That certain institutions tend to be advisers in many scenarios. Either the country solves the problem or certain banks like JP Morgan. I told them the rate of option; it is either from light touch or heavy touch. Light touch is change of management, you ask them to recapitalise. Heavy touch is outright liquidation. All options have consequences. In every country, it is the same set of options. The most critical thing for every country is first, you must understand your problem because the scale of your problem is what will influence the option you pick. The second is, any option that is preferred, you can see it to the end because all of them are painful, very painful.

The third is how much time it is going to take to do it. So, we sat down with our Board, and I said let me give you the range of options. We have already started with the light touch, and I asked them how many of you believe in this Board that government is going to liquidate systematically important banks. The answer was nobody. I asked again, if government is not going to liquidate any bank, what options have we? We went through it. Clearly, in other countries, if you are not liquidating, you have to find a safe harbour. We then asked does the Nigerian Government have the capability to resolve this problem and that was the most unfortunate decision. The Lamido Sanusi-led CBN, the Yar’Adua, and Jonathan Presidency that Nigeria was fortunate at that time we went through the scenario. Our bet was that this thing will be resolved. Most people felt it is not possible both locally and internationally. And that was why in 2009, we engaged Citibank, we engaged Accenture, we identified people who had advised winners back then, at huge cost and we have sustained that investment till today.

Why did you go for Intercontinental Bank?
Now, the reasons why others came and went, remember we were among the top five banks; when we announced our TIA, the next day, a leading South African bank made an announcement that it was still interested in Nigeria, and it was coming to Nigeria in a big way. Subsequently, I have been hearing of struggle between two Nigerian banks about which is viable. So, we made that bet and it has paid us spectacularly believing that the CBN and the FG will see this through which they have. Historically, we were well positioned to follow the resolution proactively. We were invited like every other bank in Nigeria to express interest. At that time, we were running retail banking in Access Bank up till last year January.

I sent my General Manager in the bank to work with Citibank and Accenture on Project Star which is to coordinate all the effort that Access Bank was making with respect to harnessing the opportunity for this resolution. We expressed interest in three banks, and we knew which one we wanted. We wanted Intercontinental. Why? First, after several years of business combinations, it is clear to us that if it is not transformational, the work is not worth it. The next issue was which one complements us? In other words, what is complementary to us is that it addresses weaknesses in Access Bank, and we address weakness in that institution. Intercontinental was the best because up till yesterday, Access Bank is number seventeen in terms of networks in Nigeria, and No. 5 in terms of financial services. So, we knew we had a weak branch network, and we needed a bank with strong network. The second thing was that Access Bank was very strong in corporate banking, but we had weak deposit base in retail banking, whereas Intercontinental was very strong in retail banking, having over N200 billion deposits in retail banking and in excess of three million retail accounts. Clearly, the bank has certain efficiency weaknesses, costs of funds, risks and income ratio. And these are things that Access Bank is legendary on.

When you look at things like this, it means that if you combined both banks, and you bring Access Bank’s management efficiency, a lot of inefficiency in Intercontinental Bank can be addressed. Another reason was that we use the same technology. Where most integration fails is technology. We use flexcube, and they use flexcube. And just put simply, to train a bank to understand technology and this takes anything between 12 -24 months. A bank of Intercontinental size if we are to change the technology that they use, at least it will take 24 months. Intercontinental used to poach our tellers when they went for flexcube because our tellers are very good on flexcube. So at the end of the day, if Access Bank tellers are the tellers at Intercontinental Bank, this shows you the synergy. The last is the people.
A number of people who have worked at Access Bank have worked in Intercontinental. Not many but a number. And in my interaction with our staff who have gone there, what is it like and so on, you get a fair sense of how things are. In spite of demographic differences, most of the staff went to the same school. So we have the same affinity. These are the rationale for the transaction.

The first thing is that business combination always generates uncertainty, I have worked in the banking industry for several years, and I have seen different types of banks. Interestingly, two of the banks I worked for later failed so I had an idea of what it must be when you are working in a bank that is not doing well. The first thing we had to do was we told them we understand you have been nervous, changes are coming. We had a Board meeting and the retiring Board handed over to the new Board. We went to Intercontinental and I insisted we had the normal ceremony of change of control where you recognise the role of an outgoing Board which has done a fantastic job in weathering the storm and holding the rein through good governance and steering it to a safe harbour. That same day, we had dinner with all the staff in Lagos at Eko Hotel.

How many customers do you have today?
It’s five and a half million. Access Bank is different now. It is Access-plus. It has five and half million customers. Now, Access Bank, before, yesterday has a million customers, and with the combination with Intercontinental, we have gone to five and half million. And more important to us is the platform of combined network. Our business strategy is to take banking to the consumers of Nigeria. But then, back to sustainability, I have told you that we can pursue profit, do it in a way that we will make lots of money, and we have to look at the people and we have to look at the planet.
We call it “Profit, People, Planet” and when you are talking about people and planet, how do you conduct your business as a bank, what type of services do we render, what are our labour and consumer practices, how do we add value to the physical environment, how do we lend, do our loans lead to pollution in the Niger-Delta and destroy the ecosystem?

Is what you are saying now the new thinking in the banking industry in Nigeria?
Earlier, I told you that there are three platforms to sustainability. The first is leadership. So all of us can sit down and we can agree that yes, there is pollution in the Niger-Delta, and we know who or the nature of business that is causing the pollution. Should we be concerned as to whether or not pollution takes place? Can we do something about it? As a bank, what can we do about it? What is the most effective way that banks can intervene? It is by ensuring through the practices of lending and by evaluating projects that are going to harm the ecosystem do not pass our credit.

Are you saying you will now ask a potential borrower for environmental impact assessment certificate before you give loans?
I like the way you asked the question. I am pleased to tell you yes. I like to tell you something. You will see some announcement soon from the Nigerian banking sector. We are not the only ones. If Access Bank says, okay, if you don’t pass our loan assessment, you will not get our credit. Of course, they will go elsewhere. Our target is not to harm oil companies but to change the behaviour and ensure that the impact on our environment is positive. Remember that recently, we had the Nigerian Sustainable Finance Week. One of the outcomes of the meeting was that the CEOs of all Nigerian banks have come together and we have agreed that we would change and influence the nature of interaction between the companies operating in Nigeria and the environment through our lending criteria.

What are these criteria?
We are going to come up with Nigeria Green Lending Principles. And we are going to ensure that this principle is enshrined and make a difference. You will see this happen, but this is not the purpose of this discussion. Leadership means that we have the courage to step out when others may be reluctant to do so, but probably and more importantly, we have the credibility and the knowledge to bring other people along with us. I don’t know how many of you attended our IFRS conference in Abuja. This is leadership again. We are not the first Nigerian bank to audit our financial statement in accordance with International Financial Reporting Standards, we were the second. But we were the first Nigerian bank to convert our accounting operating system. Today, we run our business on IFRS, because that is what the law says. So, we are the first and second bank, and people give us the kudos that we are IFRS-compliant.
However, the financial, economic system has not adopted IFRS. And so we had to lead and we convened the meeting. And I am sure you remember the CBN was there, including the Ministry of Finance, and all the other relevant stakeholders. And then we had a communiqué that Nigeria should adopt IFRS by 2012. The following week, the Federal Executive Council met and adopted IFRS one year earlier. That is what I meant by leadership.

What do you mean by Empowerment?
When we shifted our paradigm to not only must we excel in serving the corporate, we must excel in serving the consumers. I would like to ask you guys a question: Who is the consumer? All of us. Okay. From what stage do you start to consume, and when do you stop consuming? So, our new business model is from cradle to grave service paradigm. That we are going to follow Nigerians all the way from cradle to grave, to be their best friend, and most respected banker. And as they are consuming, we are going to empower them and enable them to consume in a way that suit their lifestyle, in a way that is exciting and vibrant, in a way that uses the very best of tools to make life easier for them and basically add value to them in that way
So with our new paradigm, we have begun to recognise that infants are clients in Access Bank. They would come in and we would say, come and open a regular savings account or Kiddy’s Savings. You can open this account and when your child is 18, he can come and use it.

How have you changed or added value to the life of that child, other than the fact that the money is somewhere?
Now you saw us launch the Early Savers Account called Dora Early Savers. How many of you here are aware of this product? What did you think about it? Shall I share the features with you? Now, just by opening an account, you have become a member of Dora Early Savers Club. Who is Dora? She is a cartoon character from Nickelodeons Network. It’s a $40 billion brand cartoon Network. First of all, if I bring Dora here and there are 1,000 children, unless they are trained, you won’t be able to stop them from mobbing Dora. The children will crush us. We won’t be able to stop them.

In South Africa, there is a zoo, and the foot fall of that zoo is 500 people a day. They have a special day for children with Dora. The first day the turnout was 17,000 people. That is the appeal of Dora. So, by attaching a recognised brand to the product, first of all, you catch the attention of the children. This encourages them to save. When you open an account, you get a Dora scrap book, and every time you save, you get a sticker that you put in your scrap book. There is a micro site which teaches kids about banking. The site asks kids such questions as do you know about the central bank, do you know about money, so at a very young age, they are encouraged to save money. So far, we have entered into partnership with 2,000 schools and our staff volunteer would go on a given day to teach infants about savings. If I have had that type of opportunity to learn as a child about the power of money, I think I would be a much different person today. Bill Gates and other entrepreneurs that we talked about, one fundamental thing is that the awareness of money and the importance and role of finance was diametrically opposite to what we had. So, this product has so many other features. It is not just about savings account, the account empowers holders to improve their lives. That is our service paradigm.

Exposing children to money at an early age would distract them from facing their studies..
First of all, if you are looking at the social issue, the malaise is not that they are exposed to money, and indeed, all the more reason why DORA ACCOUNT is important. We know that there is a breakdown in our traditional value and where you have a breakdown in your traditional value, nature abhors a vacuum. Dora is not a programme of money, money, money. The issue is this: we are family – daddy, mommy and kids; we live in a house, where did the house come from? Somebody built it, fine, so, a child should understand that mommy and daddy work hard, and since they work hard, they can take a mortgage, and with a mortgage, you can build a house. Then you need to save to rent house.

Dora is a foreign character in a cartoon, why didn’t you use a character that kids can identify with locally?
Okay, I love this. What is the brand name of this thing you are using? I-pad, OK. Who designed it, who is the CEO, he’s a foreigner. So, let me tell you why this is an important question. I-pad is the most powerful device in the world today. Let me ask you another question, the changes that are taking place today in North Africa, what was the tool for the medium? There was a particular social network, I am forcing you to recognise something we cannot do anything about which is the global forces. Now we can localise and customise but there is something you can’t fight which is the fact that this world now is one globe. Don’t forget, Dora is Spanish, Chinese, Russian, and maybe so in Yoruba. Let me go further, how many of you watch Tv late at night, and have you gone through musical television, so, okay, what has happened to our local music? When you see D Banj, 2face, and so on, and you see Beyonce, is there any difference in how they dress, dance etc.?

You find out that they are merging. You see Kanye West using 2Pac’s lyrics, so they are merging and you can’t stop it. You can’t stop them from wearing their jeans or dance the way they do. This is where the world has gone, and the trick is if we don’t do it, what will happen is that Standard Chartered and Citibank who are doing it in Spain and Russia will just come and clear this market. And we won’t allow that.
One thing you must understand is brands are global, the world is global, and we have two choices: either you create infrastructure to host global brands from anywhere else or you create entrepreneurial spirit to create the brand here. We have those two choices and we in Access Bank adopt both since we don’t have the global brand, we partner with them and create world class infrastructure to bring them to Nigeria. I want you to start thinking about something.

Nigerian banks are not known for retail banking, now that your bank plans to go into it, do you have the personnel to do that?
To begin with, if there is one profession that has demonstrated an ability to generate talents to support it, it is banking. The only other profession in Nigeria that comes close to banking is Oil and Gas industry. A profession will tilt where the money is, did you get that point? Since corporate banking became the emphasis in the 1960s/70s, the preponderances of bankers were either tellers or branch managers. How many marketers did you know in the 70s? In year 2000, how many marketers did you know? Perhaps, hundreds, because that is what the industry was emphasizing. If there is an industry that could claim it has a sales force culture that is really vibrant, it is the Nigerian banking industry. But if you ask the perspective of Access Bank itself, it is human capital development because beyond empowering our customers, we have to empower our people. So how am I going to offer world class services to consumers if I don’t train and develop my people? One of the promises we made to people who join Access Bank is this: by the time you come into the bank and you work with us, pick your contemporary in any bank in the world, not in Nigeria, at worst, you will be ranked amongst the best. If you are an Access Bank person and you are put in a classroom with others, you will be ranked as amongst the best. So, right now as we speak, we are putting together an extremely elaborate programme for retail banking, the Retail Bank School of Excellence. For us to come up to and to be able to offer in a cost effective manner, the Early Savers Product, we saw there were so many aspects of marketing that we have to learn about, and like you have seen, Access Bank is humble enough to say when it needs help. We communicate quite well as an institution and if Access Bank whose communication strategy is copied by not just banks but other organisations in this country, can say we need help when it comes to retail banking, if we need help, we will go and find it.

What about the labour market and the people you are targeting? The National Bureau of Statistics say more than 70 per cent of Nigerians are below the poverty level..
Let me deal with that. In a developing economy like ours where statistic is inaccurate, and tend to look at the demographic, you must do rigorous test, even if I must agree that the 70 per cent are below the poverty level, what is 30 per cent of 150 million? 45 million people. How many of these 45 million people have bank accounts? Do you know how many, 15 million, we still have about 30 million. Your demographic statistics showed that 40 per cent of your economy is a grey economy. Is that not correct? Within that you have already assumed that every farmer is a poor man. That is what the statistic says. If they are subsistence farmers, they are many, and there are also farmers that are not subsistence farmers and are not integrated into the banking system because banks have ignored them. You have several ignored segments in the Nigerian economy that provides huge opportunity. For instance, there is a company in Nigeria that has created the largest malting plant in Nigeria, I think in Africa. Many banks struggled to lend to that company. If you have the largest malting plant in Nigeria, it means, malting plants uses what? Sorghum. Where does it come from? From farmers. There is not one single bank that can point to where sorghum is coming from; rather, all the banks are fighting to lend. Those farmers are being financed in the value chain by that company, but because banks are not involved in the process, we are locked out from the opportunity of adding value but our eyes are beginning to open to these opportunities in agric, SMEs level, pure consumers’ activity, and we are seeing a totally different banking paradigm.

Those who fought for the independence of Nigeria, where did they go to school? None locally, all abroad, not some. Now let me tell you something, how did they pay their school fees? Did you know how they paid their school fees? From warrants that were cashed in banks? From warrants that were issued by Nigerian banks and were cashed in banks in standard banks in London, Liverpool, etc., so banks were financing agric Let me tell you something, John Major was a banker who operated in the North. Did you know that? In his own understanding of what banks do, it was financing cotton and groundnut. So, if you look at the banking industry in Nigeria in the 50s/60s, 30-40 per cent of banking was tilted towards agric financing. So it happened in the past. What changed face was the discovery of oil and the military. All that happened was that we created a short-term economic paradigm under a central command structure. Last year, Access Bank financed agric in Ghana, so, if we can do that in Ghana, why can’t we do it here? The issue is this, the entirety of our nation took its eyes off agric. The agric value chain has been weakened and damaged badly. So, government and the private sector should take steps to repair the value-chain. When we repair that value-chain, then financing will flow to it.
When I look at Steve Jobs, I saw a man who died and the whole world stopped. Nobody was talking about his philanthropic activities, and none talked about his family and his relationships with them, the only thing they were talking about was about the innovation he brought to the world. This tells you that innovation has become such a compelling force that he stands the chance of winning a Nobel Peace Prize. The world today seems to run on innovation and innovation alone. If we don’t overcome the inability to innovate, we will probably become second or third class because we rely on the innovation of others. So, Access Bank knows that in financial services, just to survive, we must operate at a certain standard of innovation. So we need to innovate. What can Access Bank do? All these farmers have phones. Have you thought of us using phones to administer the vouchers system, the subsidy system through phones? We are creating that solution. But do you know what that means? It means that Access Bank can all of a sudden have five, six, seven million farmers as our customers who will interact with us by phone. Innovation probably is the tool we will use in a cost effective manner to achieve the issue of financial inclusion by bringing in those who are excluded from the banking services today. We will use innovation to overcome that. I have given an example of how we are going to use innovation at the mass level. At the exciting level, there is one credit card that is coming. By the time that credit card comes, we will still talk more. I won’t say anymore for now. Our intention is that up to this time, we have innovated but the focus had been the corporate end, you don’t see it. Today, you use your phone to buy foreign exchange from Access Bank. This is at the corporate level, too. Nowadays, I can’t sleep anymore. The things that keep me awake is I just see myself thinking every time that there is going to be one banking product that Access Bank is going to introduce that will be like how Steve Jobs introduced ipad. Every year, let Access Bank have our own ipad. Ipad is the kind of product that even if you don’t like it, you must like it. That is our innovation angle.

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