Thursday, March 30, 2023

ABC reluctant on taking micro-finance to Africa

Banc ABC, the pan African bank said it has no immediate plans to rollout its micro-finance services outside Zambia where currently it has a strong presence.

Doug Munatsi, chief executive officer of ABC Holdings (ABC), the parent company to Banc ABC, said this week in Gaborone that his group is ‘measured’ in taking the payroll deduction business outside Lusaka.

“We will be very careful if we were to enter other markets. It is a business we will be measured in,” Munatsi said at the group’s half year results presentation.

It is suggested that regulation emerging in Africa is one area that discourages ABC to take the product to other countries where it operates, although the business will not fail to be profitable.

Botswana already has a Non-Bank Financial Institutions Regulatory Authority (NBFIRA) that was set up to keep in check unbridled micro lenders.

Earlier in the year, the bank had to suspend plans of rolling out the services to Zimbabwe although it sees the country, which is coming out of economic difficulties, having a huge potential.

“We see Zimbabwe being a micro finance market. There is going to be demand for credit. It is a market we will look at,” added Munatsi.

The Zimbabwe project was put on ice over salaries concern among government employees in that market.

However, normalcy seems to be returning to once Africa’s bread basket where multi currencies of the Pula, Rand and US Dollar are being used that have brought stability to the market that was notorious for hyper inflation.

ABC micro-finance offering in Zambia is among the top payroll deduction businesses in Lusaka.

ABC payroll deduction business has been profitable since 2008, but the banking group is careful about extending it to other jurisdictions.

The business made a P9 million profit last year in Zambia.

Reports show that it has a loan book with 40 000 customers in 17 outlets across Zambia, although it comes second to the bigger brand–Bayport Financial services.

Bayport, established in 2002, works closely with mine workers in Zambia.

Bayport’s website shows that the company has about 30 branches in that country.

At the moment, ABC is concentrating on the retail space to catch up with bigger commercial banks that control a sizeable share of the market in markets like Botswana.

Munatsi admitted they are late comers, but remains bullish about competing.

The banking group has operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.


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