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Acquisition: No redundancy, we’ll build skills, capability – Letshego GMD

By Providence Obuh

The Group Managing  Director of Letshego Microfinance Bank, Mr. Chris Low, has assured that there would be no job losses. He said this in an interview following the official announcement of Letshego’s acquisition of FBN Microfinance Bank (FBN MfB) in Lagos, just as he hinted that the company would be investing in building skills and capability among its management team.

What informed your decision to come to Nigeria to buy over FBN Microfinance Bank?

•Mr. Chris Low
•Mr. Chris Low

Primarily, our mission is to be Africa’s leading financial services group and if you are going to come to West Africa, Nigeria is mainly the place to start.

We have been looking at this market for a number of years and we look to the opportunities, before FBN MfB was shown to us, which is a business fully in line with broad based financial inclusion agenda in terms of services and client base and so we decided to go ahead with the transaction.

What new things are you bringing to the table as Letshego Nigeria?
We are hoping that we would develop a recognized financial inclusion agenda that would cover the health, education and agricultural sectors and we would be looking to see other opportunities that exists for financing low cost, low income housing.
Also, in other parts of the world, what we do is providing consumer finance and secured loans to government and low income salary earners. We would also be looking at the opportunity and of cause managing that within the regulations.

How do you intend to compete with the existing MfB’s in the country with similar service?
A good question and the answer is very simple, customer experience will make the difference, competing around price does not work, but it is identifying and anticipating customer’s need and providing support, affordable and appropriate solutions to meet those need, so it is not complex solutions but it is about what they need to improve their lives and finding a way to provide that in a low cost and effective manner which means using technology to deliver that finance where they are not where we are.

It may be mobile or the internet, whatever it may be, ours is to provide direct services to the people, you may say that is being done by some of the other players but we are developing expertise on a multi-geography basis that would help us achieve our goal, but it starts with the customer.

What would you be doing differently to handle the issue of bad loans?
There are a number of different things, our starting point which obviously have started with the previous team is to invest heavily in training around credit, we have to have the right upfront approval process as well as the ongoing monitoring processes as well as market recovery processes, we are going to entrench that as the starting point, secondly we have to use technology to be effective in terms of the monitoring and ability to pay, sometimes customers default because they cannot get to where they need to pay back, so we will use technology to improve on collective capability and monitoring capability.
I guess we are using technology to introduce dynamics score carding in other word, it manages behaviour on foremost day to day basis and when we find that such an assumption is about ability or willingness to pay a loan, we can adjust quickly so that it does not become a big hold, of cause there is a cost of doing business which is credit risk but we pride ourselves on running as a group.

Reaching the rural areas and especially the rural women, what is your strategy?
Rural focus is absolutely central to Letshego’s philosophy, we see a lot of congestion in providing financial services in the cities and so our normal working model is that we have one branch in the capital of the business city and all the other branches would be in the region.
One of the attractions of FBN Microfinance Bank is the National licence and in due course, we will definitely be looking to expand beyond Lagos where we primarily are today and in Abuja we have a branch. The question of how, when and where to start is a thing we have to obviously agree the strategy we want to adopt clearly on that front but you will see more of women and rural strategy going forward.

How do you intend to maintain existing staff and what are your reshuffling plans like?
I would say reshuffle is an interesting word because we want to build management skills and capability and am sure there would be some changes but definitely it is not going to be mass redundancy. The MD/CEO of FBN MfB Mrs. Pauline Nsa, has built a successful business and we want to take it to the next level and the best way to do that is to use the existing team that understand the business and take them to the new dynamics of growth.

On working with the Central Bank of Nigeria  Like any other regulator, we have to adhere directly to their regulations, we are a public company in Botswana and therefore even if we wanted which we don’t we have to comply because our reputation is very important. The approval process went smoothly by providing information to every question to FBN Holdings. We commend the CBN for giving us this opportunity and we want to tell them that we wish to be a responsible organization within regulatory framework for microfinancing

Are you aware of the N220 billion Micro Small and Medium Enterprises Development Fund? How do you intend to access the fund?
We are well aware of it and we would be meeting with the relevant people that we hope may provide us access to some of these funds as well.

When is Letshego likely to kick off?
We have already started business.

Rebranding
We have an agreement with FBN holdings that we would have a transition period which is not just one day, there are 28 branches, we are launching the new brand as a group and within a few weeks we will start the rebranding process, within six months our branches would be Letshego MfB.


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