Okpeh Andrew Ekoja is the Managing Director/CEO of FIT Micro Finance Bank Ltd. A banker who is driven to heights through determination and many years of experience. As the mantle rests on his shoulders to drive the new micro finance bank very soon, Okpeh in an exclusive interview with some journalist’s speaks on the strength of FIT MFB Ltd, their capital base, dealing with customers among other issues.
By Tony Edike
The FIT Group is coming up with a Micro Finance Bank come 5th December 2024, what formed this opinion?
Well, the unbanked and the Under-banked segment of the financial sector largely informed our decision to venture into the Micro finance industry. Although we intend to leverage on digital technology to create innovative solutions to ease banking challenges of these group that consist of over 65% of the banking population in Nigeria. We have partnered an IT Solution Firm, though organic but one of the best in the Micro Finance space to achieve our goals. We have also deployed a robust Core Banking Application CBA, top notch to meet our target profitably that is cost effective to maintain.
How ready are you as the pioneer MD of the bank to enter into the financial market, where today savings culture is going down due to hardship?
As the pioneer MD of FIT Micro Finance Bank Ltd, I am ready to take on the financial market by targeting the active Low- and medium-income class to grow them into wealth. We have carefully designed products & services that will encourage their saving culture despite the hard time with appreciable interest rate on the Daily Saving, group Saving, Micro Credits with friendly interest rate to help grow the business of MSME and also offer Free Financial Advisory session, helping them to navigate the difficult terrain of the present economy. We are also leveraging on some digital platforms to profile, track & recover credits advanced to our customers while partnering government MDAs grant loans to their workers and effectively monitor the repayments accordingly.
In Enugu, there are other Micro Finance institutions, how prepared are you to face the competitions and other conventional commercial banks?
Globally, the banking space is like an ocean. Irrespective of the age of these Banks in Enugu state with due respect to their owners, banking products are homogeneous differentiated by brands. Our strategy is speed, Accuracy, precision and customer satisfaction. This will be achieved through the experienced human capital in our team, Strategic managers and the robust Information Technology solution to make banking easy to our customers. Again, the products are Individual, Group and Corporate Savings accounts with good interest rate, Current accounts, Investment/Fixed deposits, Loans and Salary advance, Overdrafts. Cooperative account, Daily contributions, POS, ATM, FIT Mobile App, Salary Administration, Payment services & Housing loan for renovation.
As you are about to hit the ground running with the latest MFB, how much have you earmarked to support micro and small businesses in the first two years of its operations?
Our capital for the Micro Finance Bank is N200m. But we will surpass that, at the moment, we are at about N255m. That two now include the breakdown of people that have assets, both fixed asset and intangible asset. But by the regulation of Central Bank of Nigeria (CBN), it is not supposed to be in excess of 20% of that amount of money. So, what we set aside for business itself is in excess of N150m from micro credit to medium small businesses.
Though, we still have projections because we are looking to grow our deposit base further. So, for the next one year, we are looking forward to creating quality risk assess in excess of N200m. Our funds are going to come in from prospective investors who are the parent owners of this company. We are looking and target our high network customers within our axis who we have started meeting already and they are pledging to support us as we take off. In the next one year, we are looking forward to excess of N150m.
How prepared are you as the first MD/CEO to face competition given there are many established Micro Finance Banks (MFB’s) in the system already where today’s savings culture is going down due to hardship?
As the pioneer MD/CEO of FIT Micro Finance Bank Ltd, I am ready to take on the financial market by targeting the active Low- and medium-income class to grow them into wealth. We have carefully designed products & services that will encourage their saving culture despite the hard time with appreciable interest rate on the Daily Saving, group Saving, Micro Credits with friendly interest rate to help grow the business of MSME and also offer Free Financial Advisory session, helping them to navigate the difficult terrain of the present economy. We are also leveraging on some digital platforms to profile, track & recover credits advanced to our customers while partnering government MDAs grant loans to their workers and effectively monitor the repayments accordingly.
Again, I want to let you know that most MFB’s had long stayed in the system with mundane operations. But we are leveraging on digital innovations to reach out the unbanked and under-banked within the system which is a very wise thing that in Nigerian financial system they consist about 65-70% of the banking population.
So, how do you want to achieve this?
We have partnered with a global Information Technology (IT) company that in the past has over 20 years’ experience in Microfinance bank software. This allows us to function like what we have today in Monie Point, OPAY and PALMPAY etc. Our vision is to compete at that level because virtually in all the states in Nigeria, one does not see any branch of Monie point, but a whole lot of works is going on. Digitally, they are up there. Their systems are seamless and we are partnering our operations towards that too. Right now, at this stage we are leveraging on technology to reach out to these areas. For our internet service provider, we went a step further to launch through star link. It is a guarantee that with star link, the uptime is over 95%. Then in the next one year, my projection is that we too will leverage on the point of sales and it will not be less than N50,000 to reach out to all nooks and crannies of Enugu state, and the entire southeast and beyond. This is where the real money is. Every southeast operator that is using you on the site is an e-branch. From there they can open account do what we call payment services that transfers to further banks. They do cash transactions too and we support them. Now any that will approve custom there are those charges that will be shared between NINs, service provider and the bank itself. So, we are looking at the fact that for every transaction, our POS operators they do, out of that N100.00 or above will be earning about 45% of those money. It may look small, but cumulatively, depending on the total transactions per day, you will be arriving at a very substantial amount of money. Monie Point’s recent capital base is in excess of N1b Dollars. So, we want to leverage on that because we have the forms and the capacity to reach out the unbanked and under-banked sector in this system. With this, in one year, in the entire south east, FIT micro finance bank will be the number one in terms of technology, various innovations. With the artisans and market women all will be reached out to. We will be deploying and streaming our marketers with a device on their android. Out marketers can get to a shop owner with their device in your shop, you will get the account details with just minimal requirements to open that account.
How do you intend to go about this?
This android is empowered and digitally inclined to capture the customer’s deposit and post, then get the SMS alert of the credit of the money given to those agents in the field there and you get an alert immediately credited into your account. At that point, when they come back, we now reconcile the account and balance up their books. Now, we will provide security for them as they go on field. For the insurance, NDIC is there with them. For other insurance against theft, burglary, we are with Lead way Assurance already and our transactions are cloud free physical natural disasters might not affect us and we are putting up a strong Nigerian Data Protection Council (NDPC), our IT Head here is CISCO satisfied. He is on training with the NDPC to up his itinerary to see how our data’s while even the clouds are well protected with firewalls, so we cannot easily be hacked in. We have also deployed our websites where customers can get information about the bank, download forms and templates from there, subscribe to so many of our products and services where one can apply. One must not visit our location to assess our credit facilities. We are leveraging on technology, even help us further with special recognition, IT and address verification, utility bill will be very fine and so much more that we have done. Soon, I will consolidate my discussion with IPPIS authorities because when we give federal workers credit, and even the low income and middle-income earners can access our source, we will deduct ours as a partner of IPPIS. We are looking forward to doing so many innovations. The problem with the microfinance space which is a bonus is that every customer has as identity, for one to do any banking related transaction in Nigeria, one must have a Biometric Verification Number (BVN). BVN is one of the best collaterals in Nigeria.
With the ongoing tough economic reforms of President Tinubu administration, many are concerned that more Micro Finance Banks may soon collapse. Do you share this view and what in your opinion should government do to stabilize the industry?
I disagree with them because if one sets up a bank which is running smoothly, and are also guided by the policies and procedures of the regulatory authority, and working in agreement with what is correct; then the bank is a growing concern. Now you have money you have been trading over the time, if you follow the rules by the book and doing the right thing, there is a tendency for you not falling into the pit. The reason why some micro finance banks went under is because they are not mindful of what the regulatory authorities tell them. Most of them were one-man business that does as it pleases. The family members can come and take loans based on his approval and not based on credit approval. Even when they did not meet up with demands. Then when they do not pay, it becomes damage control. There are a lot of portfolios at risk in excess of the allowed able percentage which is not supposed to be more than 7% of one’s capital. Your bad loans are not supposed to be more than 7% of the capital to which one does business in the bank. But contrarily, one finds out that their percentage are in double digit which is a red flag already. Mosty of them already have liquidity issues in fixed deposit they are using to trade. FIT micro finance will not be like that. We tend to play by the books profitably. That is why we are deploying every necessary technology to our own advantage. The worst-case scenario is when it gets bad, one deploys legal means. Legal means could take another dimension like a legal court arbitration takes place, then both parties re-negotiate new terms to which that loan would be paid. At this point what one is supposed to do as a banker is to stop every interest on that loan because it has gone bad already. All penalties that will increase the amount, the customer has taken and what he has taken before as differential, then; it will be spread it to a thin line to which one will be able to meet with the obligations and finally clean the books.
Recently, cashless and technology failures in many banks have created fear in the mind of some customers that they industry is sick. Many now prefers to keep their money at home or with some fintech companies, what is your advice to such customers?
I am sure that before you put your money in a bank, google the bank. Find out about the bank. There are some banks in Nigeria that are very unhealthy. One should not take their money to those banks. Such customers are at their peril.
But banks would not let customers know this?
Yes, that is why I said we should not be carried away by emotional blackmail to deposit money in a bank that is about to go under. Now, before you put your money in bank, make your inquiries There are some banks in this country that has not submitted their audited financial statement in the last three years which is a red flag already. There are new banks who are coming up, very strong, check out their capital base, monitor them at the end of every financial year, find out the necessary things. Some of them have been removed from the stock market while gigantic buildings are still there. The world is a global community now, the Fintech drives the banking industry as we speak. Guess you do not know where Monie Point office is located.
I do not know where the offices of Monie point, Palm-pay and OPAY offices are located to make complaints.
The world is a global village now. My staff strength in FIT Micro Finance bank will not be more than 12 in number. All of them are computer literate. We work seamlessly, digitally and do everything humanly possible to keep the bank going. Then, our idea of innovation should be where to invest and when not to invest your money. Recently, the Federal government just released the sub-treasury bill for the month of November which is very sound, as a banker, one looks at it. Instead of leaving idle fund of about N150m in an account that will not generate anything, it will be advisable to buy a treasury bill of N90m, that is three months of about N60m; and at the end, one would be getting about N2,3 or 5m at the end of the day which will add up to the years profitability. Most MFB banks that are going under did not play by the rule. CBN rules is clearly stated that they should not give more than N2m to an individual or even a corporate account in MFB. If you want above that, then approach a commercial bank. But one will see some MFB giving between N8-10m loan to an individual. Customers are the sharks because they will be here when we launch, they will deploy all their money to impress us, but by the time they take the loan, we chase after them to recover. With my experience over the years, as customers are coming when we open, my loan to them will not be in excess of 18-months. The loan given to a customer will be monitored. Loan monitoring is key because most of these microfinance banks do not monitor their loans until it gets bad. If I take a loan from you and do not meet up with the first one month of my repayment, I should tell you that your account is in debit. If I did not see you within one week, I will find out what the problem is. We have also learnt the Stop-I falsification from the commercial bank called which means the business must be visited for evaluation of what you have and the amount you are requesting for
