By Providence Obuh
Letshego Holdings Limited, weekend, announced the successful acquisition of a 100 percent stake in FBN Microfinance Bank (FBN MfB) from its parent, FBN Holdings Plc, so as to advance its diversification and financial inclusion plan for Africa . Letshego is a financial inclusion focused group with consumer, micro lending and deposit-taking subsidiaries across Southern and East Africa. FBN Holdings Plc is the oldest banking group in Nigeria, established in 1894 and listed on the Nigerian Stock Exchange, while FBN MfB was established in 2009 and has been awarded the CBN’s National microfinance banking licence.
Speaking at a press brief, Group Managing Director, Letshego, Mr. Chris Low, highlighted four strategies to be adopted in its operation to include: Diversification; Provide access to financial inclusion; Provide simple, appropriate and affordable services and Provide access anywhere anytime, while focusing on key areas such as Education; Health; Agriculture and Low income housing.
Low said, “As the leading indigenous BSE-company by market capitalisation and profitability, it is an exciting time for us. This opportunity to enter the Nigerian market coincides with the expansion of our range of financially inclusive products and services. We believe Nigeria’s growth prospects in our targeted low-and-middle income and micro and small enterprises (MSEs)
Customer segments have significant upside potential and by bringing our skills to this market, we can further financial inclusion and improve lives across Nigeria. We look forward to being able to further improve lives across the continent through this development.” On decision to sell, Managing Director, FBN MfB, Mrs. Pauline Nsa, explained that FBN Holdings decided to sell its microfinance subsidiary in order to realign the focus of the group on its core businesses.
Recall that FBN Holdingsf holding company structure allows it to own and operate the microfinance bank. Central Bank of Nigeria (CBN)fs Scope of Banking Activities and Ancillary Matters No 3, 2010 requires banks to fully concentrate on core banking functions. The new model requires banks to either sell all non-core banking businesses or form a holding company to hold such non-core banking businesses including activities such as insurance, asset management and capital market operations.
However, the acquisition marks Letshego’s entry into West Africa, having successfully built a footprint in East and Southern Africa with 265,000 customers across nine countries. This development brings Letshego’s footprint to ten countries, with a customer base of over 385,000; Nigeria in particular has been a key target market in it’s diversification plans.