Who We Are
VISION
To be the leading pan-African mass retail bank realising a fully financially-included Africa for socio-economic development and poverty eradication in the region
MISSION
We deliver full range of financial services, at scale and at high degree of efficiency, to the vast population of unbanked and under-banked low income population across Africa using advanced technologies and ecosystem rails for scale, simple, fast and 24/7 accessibility of our services anytime, anywhere, supported with widest distribution network present and within 5 minutes of walking distance from every neighbourhood, and significantly enabling the socio-economic empowerment of our customers and development of African communities and economies.
VALUES
Integrity – we remain true to our vision and mission always
People-centeredness – the interest of the un(der)banked are at the center of all we do
Empathy – we are moved to end financial and socio-economic exclusion of the poor
Courage – we are resolved enough to achieve the vision and fulfil the mission
Excellence – we deliver services at world class quality
Professionalism – we serve in line with standards
Global reach – we are committed to fight financial exclusion and poverty in Africa
PHILOSOPHY
Our “true” digital Retail Operating Model
FSE Holdings’ banking subsidiaries are focussed on banking mass retail population using a fully digital retail operating model to ensure banking the market at scale and with efficiency to deliver reasonable commercial returns. There are three sub-models of the FSE Holdings’ banking subsidiaries operating model namely branchless distribution model, and ecosystem-driven customer mass acquisition / on-boarding model and digital-only model for product access, transacting and processing (front/ back-end).
In terms of distribution, FSE Holdings’ banking subsidiaries will not own branches; they will rather use locations and retail outlets of third party agents (shops, kiosks, petrol stations etc.) to serve their customers. This overcomes the limitation of traditional bank branches where who are customers far away from branches usually located in urban locations are not reached; with agents it becomes possible to reach and serve customers in their neighbourhoods and close to their doorstep. Also the banks avoid the usual huge costs of building, staffing and running branches. This is the distribution model driving all successful retail brands.
In terms of ecosystem-driven customer acquisition model the banks do not acquire customers organically and directly where bank’s staff market customers and open accounts. Rather the banks acquire customers en masse through ecosystem partners (Telcos) who already have these customers on-boarded on their platform and possess relevant data and history needed for immediate KYC requirements compliance and products design and delivery. This model enables rapid customer acquisition at scale and timely on-boarding to product and services.
The third element of the model which is the core enabler of the overall model is the full digitisation of both front office and back office of the bank. Products are served and consumed only on digital channels (USSD and mobile Apps) while transactions are processed digitally. This digital-only model provide capacity to deliver products and process transaction at large scale and with speed.
The operating model of FSE banking subsidiaries is a departure from the common (non-retail: wholesale banking) model that has been and is still been used by many financial institutions to serve that segment in Africa which has resulted in failure or limited success – small scale reach and sub-optimal returns. The failure or limited success of this common model is responsible for the high rate of financial exclusion (over 60%) where about 400 million people remained unbanked in sub-Sahara Africa (World Bank, 2018).
Our Double bottom-line: Commercial-Social Value Model
At FSE Holdings we have a double bottom-line of both profit and social impact objectives and we believe that both objectives need not be mutually exclusive. We believe further that a commercial model driven with a social impact heart is needed to effectively bank the mass retail at scale and for value – commercial value for investors and socio-economic impact for customers. Our choice of a commercial model is due to the recognition that the unbanked population is a market in its own right which deserves to be served as such - commercially. We believe that the poor and low income population can be served successfully using a commercial approach that is fit-for-purpose. And there are a few success cases already both in Africa and globally. We believe that a commercial approach is important to ensure sustainability and attraction of commercial resources which is critically needed to supply the huge resources required to serve the segment adequately.
Our choice of social impact heart is because firstly, access to financial services is a means to an end and rather than end in itself. At FSE Holdings we recognise this reality and are keen to ensure that our financial services are designed to enable our customers to climb the economic ladder. Consequently we design our products with tis mind and also we offer non-financial services that help our customers use pur services for value. Secondly, we are aware that banking certain segments of the market which are hardest-to-reach (rural dwellers and farmers etc.) may not be profitable early due to additional or requisite investment that must be made to reach break-even point and for that reason social investment will always be needed to underwrite such investments and costs. Many banks and micro-finance institutions focus on urban customers where risk is lower and path to profitability is quicker. But to bank the unbanked at scale without discrimination which is the ambition at FSE Holdings’s banking subsidiaries partnership with social impact investors and organisations is essential.
LEADERSHIP
Dr. Rotimi Nihinlola is the Founder and Director of FSE Holdings International Ltd and the sponsor of FSE Bank project. Dr. Rotimi Nihinlola is a financial inclusion and poverty expert whose vision is for us to have a world that is inclusive Financially and socio-economically and poverty-free. A senior pan-African banker with over 25 years banking experience, spanning all customer segments, but has devoted half of his career to the focus of banking the unbanked. For over 10 years has been managing a leading and award-winning pan-African microfinance and financial inclusion operation that serves millions of previously unbanked customers across many African countries. With the ambition of reaching 100 million unbanked low income Africans in the medium term he led implementation of a large scale fully digital micro savings and lending services in several markets in partnership with leading Mobile Phone Operators and financial technology firms. In general spheres of banking he played senior roles at various times supervising teams across 40 countries in Africa, Paris, London, Dubai and China, as COO of Corporate and Retail Bank, Group CFO, director of boards, among others.
A chartered accountant, Dr. Nihinlola completed a BSc in Accounting as scholar of elf-Petroleum (TOTAL), and holds MSc Economics (The University of Sheffield, England) and PhD in Human & Social Services focused on financial inclusion and poverty (Walden University, USA). An alumnus of HBS-ACCION microfinance leadership program of Harvard Business School, Dr. Nihinlola is also an author of an Amazon #1 best seller new release book – A Poverty-free World: from Dream to Reality – in various categories including social security, social services and welfare, agriculture & food policy.
His ambition is to create the leading and largest pan-Africa mass retail banking group, owned by FSE Holdings International Ltd., that is focused exclusively on the unbanked and under-banked low income segment with the goal of banking 100 million low income customers in Africa by 2030.
MESSAGE FROM THE FOUNDER/ DIRECTOR
Banking the unbanked – the opportunity
Financial exclusion is a big challenge and also an opportunity in Africa. According to the World Bank report (Global Findex, 2017) there are ...% unbanked adults in sub-Saharan Africa. That is a significant challenge for development because most of the unbanked are also unsurprisingly poor. Without access to financial services they have limited opportunity for economic empowerment and ability to lift themselves or be lifted out of poverty.
In terms of the opportunity the unbanked population is a sizable consumer banking market with significant revenue and profit potential. The total customer base of all the banks in sub-Saharan (over a thousand) stood at less than 150 million as at 2015 (Bain & Co, 2015). With 590 million adults in the region we (all the banks and financial institutions) are serving only a quarter (25%) of the banking market. Considering that formal banking has been in existence in Africa for over a century this level of shallow or under-banking is unacceptable! But why? Why have banks remained in only one quarter of the market. Is it that the remaining 3 quarters are un-bankable or unprofitable? This is sometimes the assumption but one that’s not supported by facts. A recent report issued by McKinsey shows that if 45 million unbanked Nigerians are brought into the financial system there’s the potential of adding $88billion to the country’s GDP (12% growth), $57 billion to the credit book and $45billion to the deposit book in the systems. To contextualise this potential the current total credit by banks in Nigeria's financial system is less than $50 billion; banking 80% of the unbanked population will more than double the credit volumes in the market. The Nigerian example can be extrapolated across Africa. And the significant value potential in this mass retail banking segment is in line with value potential typical of consumer retail business generally. Consumer retail businesses and brands are large scale revenue and value generators e.g. FMCGs (fast moving goods – sugar, milk, coca-cola etc.), services including financial services (western union, visa, mpesa etc.).
Why are banks not mining the opportunity? Why is FSE holdings rising up to fill the Gap?
The big question is this – if there is a significant business case here, then why are banks ignoring the segment knowing that they would like to make money and generate shareholder value? The answer is the following- lack of understanding of the business segment and the right model to serve it at scale efficiently and profitably. The traditional banking model that has been practised in Africa for ages is, largely, not fit-for-purpose for mass retail customers. The traditional model is expensive, urban-based and elite and thus unable to achieve scale operations without sacrificing viability hence many retail banking units especially mass retail businesses have struggled with viability or loss-making and therefore de-prioritised. In many banks corporate and commercial banking businesses are prioritised because they are more profitable. This is antithetical; in the larger economy mass market consumer businesses are the higher value generators – walmart, amazon, coca-cola, pepsi etc. Again, mass retail banking in Africa has been largely unviable and unattractive due to use of wrong model; we have been using merchant/ wholesale banking model to serve retail banking customers. To unlock the value in the consumer bank mass market we need a model that is fit-for-purpose and one that applies time-tested strategies used in successful retail businesses the world over. All retail businesses are similar, bank or non-bank fundamentally and ought to be operated in similar fashion with tweaks where required.
It’s a new day...
But the good news...the time to unlock the hidden value in mass retail segment is here! The understanding of the customer segments and how to serve it is increasing. The enablers to serve the market are here also. The model that removes the constraints and solves key questions- cost, scale, risk management and reach- is also here.
Non-bank players especially mobile network operators (Telcos) have successfully served this market where banks failed- Telcos using the right insight and retail model have been providing payments and remittances through mobile money to the mass market. We now have over 100 million unique mobile money accounts across Africa, almost the same number as bank accounts in less than 10 years whilst in some countries there are more mobile money accounts than bank accounts. Telcos have moved further to providing loans and savings to this market in partnership with banks and I have been at the forefront of that implementation across Africa. Recently, one of the Telcos has now obtained a banking license to fully bank that market on a regional basis. There are a few fintechs also who have been taking micro-lending and some savings and lending licenses and serving that market.
Common to all these cases is the use of the right model which contains some of the key elements required for success - use of technology, reliance on third party distribution networks, customer insight-driven product sets, leverage of ecosystem rails etc.
The model ofFSE banking subsidiaries has the complete set of all the key elements and the strategy is shaped by experience, practice and research spanning two decades of leading an award-winning regional microfinance banking operations of the largest pan-Africa bank. Part of the uniqueness of our model is that it has a dual mission and double bottom line – profits and social impact. We will deliver profits for shareholders and we will simultaneously deliver for our esteemed customers across the three dimensions of Financial inclusion, Social inclusion and Economic inclusion hence our name – FSE.
I am excited as the next decade (2021 to 2030) is the decade of emergence of large and successful mass retail banks in Africa and I am honoured to be leading the founding of a bank that is positioned to lead that space to realise the maximum value that is holds for all stakeholders – investors, customers, employees and communities.
Thank you.
Dr. Rotimi Nihinlola
Founder / Director
FSE Holdings International Ltd.