FirstBank Microfinance Bank Limited, with 23 branches in Lagos, seeks to expand its operations to other states of the federation, specifically Ibadan, Oyo State, and Abuja, FCT, among others.
This is in response to the demand by people living outside Lagos to set up FBN MFB in other areas.
In its expansion drive, the bank will be looking at growth both by way of physical brick and mortal and by way of technology.
“We do not want to be setting up branches because of the cost, so we are looking at using more of technology to expand. That is not to say we will not have physical branches; so, with our national licence and enhanced capital we are ready in setting up some branches in places like Ibadan and Abuja,” Pauline Nsa, managing director, FBN MFB, said in an interview with BusinessDay.
The bank’s strategy is going to be different as it will set up as many small branches as in one branch that will take care of small shops around the location. In addition to that, it will leverage on Firstmonie, an initiative of FirstBank of Nigeria Limited, to do money transfers.
FBN MFB that has 67,397 savers and N2 billion capital base, disbursed N15.9 billion loan as of December 31, 2013. “In 2012, we made a profit before tax of N307 million, and in 2011 we made N307 million PBT. In 2012, we disbursed N3.3 billion to 8,949 customers, total active customer was 83,642 as at December 2012,” she said.
Responding to measures driving the growth, she said “basically, a large percentage is hinged on the type of operators and what they are doing. The quality of staff has helped also. Secondly, the brand loyalty of the Group, FirstBank, has been in operation for a long time and now we are talking about FBN Holding Company. This is a brand that has been tested and trusted by a lot of people, and that confidence has made it possible for us to attract deposits. The more deposits you have the cheaper the funding and our capital has been sufficient.”
The bank commenced operations in 2009, and has consistently posted profit. “Why our operations are different is because the foundation was laid from onset. FBN Holding Company owns all the subsidiaries in the Group. Whenever something is to be done, a decision is taken by the board of the holding company and whatever they like to do they do it well. So, the foundation has to be right. It took them time to come up with policies and procedures that they will operate, how they operate, the IT infrastructure to capture those small transactions on real time basis. They looked at capable staff that would manage the subsidiary,” Nsa said.
Looking at the sub-sector holistically and what could be done to save it from collapsing, she said: “Basically, what will save the sector is injecting fresh funds. However, the operators are different in the sense that you need to have trained people. There are some issues that the CBN has tried to address. Issues like training to get some of the operators to speed. If the foundation itself is not right, you really cannot do much. If the same operators are still operating and have not changed the mode of operations, you cannot expect a dramatic change even if you bring fresh funds. Some of the investors have not been able to bring in money because they do not have the confidence that putting in money will bring any different result,” she said.
