November 12, 2021

IMHOUDU MAMUDU: Erudite economist improving SMEs through funding

IMHOUDU MAMUDU: Erudite economist improving SMEs through funding

His track record as a banker and risk manager has positioned him as an outstanding professional whose vast knowledge in finance, economics and law has seen him break barriers, while setting new records in building and managing institutions.

Mr. Imhoudu Mamudu is the pioneer managing director and chief executive officer of Crystal Finance Company Limited; a one-stop financial institution dedicated to providing financial services in the areas of credit, funds management and financial advisory to individuals as well as Small and Medium Scale Enterprises (SMEs).

With an enviable knowledge in corporate governance, risk management, financial management, banking operations, micro finance banking, credit analysis (secured and unsecured lending) and private equity, he deploys a multidisciplinary approach in solving every day organizational issues which makes him stand out in the boardroom.

A graduate of Economics and Statistics from the University of Benin, he also bagged an MBA from Lagos State University, M.Sc in Economics from the University of Lagos and an LL.M in International Finance and Banking Law from the University of Liverpool.

Prior to the establishment of Crystal Finance in 2015, he had an amazing career while in the services of Prasz Limited as partner responsible for Origination and Transaction Execution; Gapbridge Micro Finance Bank as Group Head, Bank Wide Operations, Risk Management and Information Technology, and Zenith Bank Plc where he handled functions in Banking Operations, Relationship Management and Risk Management.

As a company known for its flexibility in providing bespoke financial services tailored towards individual clients need, Mamudu explained that Crystal Finance operates on two important strategies which has helped the company build its organisational culture, retain organisational/company knowledge and also help build trust among its clients.

First is the People Policy which has helped in building and sustaining a team of dedicated and experienced staff with broad industry knowledge in handling each clients request, while the second strategy is enshrined in a Customer Service Policy of ensuring transparency and good ethics in all its dealings with its clients. These policies have no doubt contributed significantly to the success of the company, while also earning notable recognitions which include the African Finance Award for the Most Trusted SME Finance Company for the year 2020 and the Gold Award for Most Customer-Focused Finance Company by the West African Innovation Awards in 2018.

With a focus on increasing access to funds for SMEs given their importance to the economic growth of the country, Mamudu explained that financing SMEs in Nigeria is a very risky business venture owing to two major factors namely; very high moral risk and low financial literacy level of most SME entrepreneurs.
According to the CEO who is a Certified Micro Finance Banker and a member of the Chartered Institute of Bankers of Nigeria, the moral risk stems from a situation where the entrepreneur/borrower has not entered into the lending contract in good faith or has provided misleading information about his business status to the lender. While the low financial literacy level of the SME entrepreneur limits his ability to take optimal financial decisions in the face of external shock or uncertainties. Losses incurred from poor financial judgement by these entrepreneurs are invariably transmitted to the lender.

In mitigating these risks associated with SME financing in Nigeria, Crystal Finance provides loans to its clients on the strength and basis of their transaction as the issue of collateral is de-emphasised. More importantly, the company has built a lending model that helps de-risk its client at the point of intake thereby minimising the moral risk associated with SME lending. The company also sticks with its clients throughout the duration of their loans, advising them and helping them tide through difficult times.

“Our business and client acquisition model has helped ring-fence our loan portfolio against moral risk which is the biggest source of irrecoverable default/losses. We handle other sources of default stemming from economic shocks, negative surprises and policy changes by structuring and availing loans for tenures within which economic activities can be predicted with some level of certainty. For any tenure outside this time horizon, the company sought for additional comfort from the borrower to cover its exposure to economic and systematic risk”, he said.

The result-driven CEO who also sits on the Board of Emerging Market Telecommunication Services (9 Mobile), informed that his motivation stemmed from his early work life as a young banker whose mind was preoccupied with how to help honest people secure funding for their businesses without worrying about collateral and building an enduring institution.
Those early yearnings became fused and culminated into what is known today as Crystal Finance Company. “Our funds management activities comprises of tenured investments from individuals and corporate entities. These investments range from 90 to 365 – day instruments. For every client who has successfully completed an unsecured loan cycle with us, we are inspired to do more and for others and we hope to build a financial ecosystem where trust becomes the cement binding lenders and borrowers within”, he said.