Ecobank: Banking for the Bottom Billions

Kigali, March 15, 2012

« WE DO NOT HAVE AN AFRICAN STRATEGY…

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…AFRICA IS OUR STRATEGY »

- Arnold Ekpe, Ecobank’s Group CEO

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Contents

Financially Excluded Bottom Billions

Ecobank Group Credentials

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11

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I

II

Chapter 1

Financially Excluded Bottom Billions

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• People who do not meet the requirement of traditional banks in operating savings

accounts and/or accessing credit.

• Financial deepening is low

• 75% of the population are financially excluded

• 52% of Rwandans are financially excluded

• 20% of rural savings lost to fire/floods

• Women are most vulnerable (68% of Zambia women are financially excluded)

• Conflict areas (1 in 3000 has bank account in DRC conflict-affected areas at the height

of the war)

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Who and Where are the Bottom Billions?

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• Why is the Bottom Billions Financially Excluded?

Demand Factors • Low per capita income • Illiteracy/ Lack of knowledge of financial

services • Lack of trust and savings culture • Lack of property rights/titles • Pricing and affordability • Lack of bankable projects

Supply Factors • Poor risk sharing mechanisms • Lack of product innovation • Underdeveloped Payment System • Reaching remote population

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Importance of Financial Inclusion for the Bottom Billion

• Reduces poverty cycle

• Reduces vulnerability to shocks

• Increases productive investments/incomes

• Generates employment creation

• Promotes access to health and education

Providing Access to Finance for the Bottom Billion

Source: African Economic Research Consortium

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Meso Level

• Micro-insurance

• Financial literacy programs

• Adapt technology to finance (mobile banking can reduce transactions cost by 50%--

M-PESA)

Micro level

• Target savings products

• Support to Agriculture Financing

• Support to Housing Finance

Source: African Economic Research Consortium

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Macro level

• Legal and regulatory framework for delivering financial services to the poor

• Protect consumers from predatory banking and abusive practices

• Contract enforcement on property rights and other areas

• Promote competition and removing barrier to entry

• Develop business infrastructure (rural roads, power, payment system)

• Information collection through credit use and registries/National identification system

• Harmonize Regional banking standards and protocols

Role for Parliamentarians

Chapter 2

Ecobank Group Credentials

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The Leading Pan-African Bank

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• Leading pan-African full service banking group

• Present in 32 African countries,more than any other bank

• Focus on Middle Africa, the fastest-growing and under-banked

• Vision to be world class and operates to international standards

• - reports in IFRS and US$ and compliant with IFC Corporate

Governance principles

• 8.3 million customers, 23,000 employees, over 1,100 branches

• • Listed on 3 stock exchanges: NSE, GSE & BRVM

Building Scale: Already top 3 in 15 African countries

• Seek to be a top three bank in each of our

• markets

• • Scale in each market is critical for

• competitiveness:

• - ability to handle major transactions

• - enhanced lines of credit

• - economies of scale

- enabling roles such as clearing

• We are currently No. 1 in 7 markets– Chad, Burkina, CAR, Togo, Liberia, Guinea and

Mali

• We are in Top 3 in further 8 countries: Sao Tome, Ghana, Cote D’Ivoire, Senegal,

Benin, Guinea Bissau, Rwanda, and Niger

• We are in Top 5 in Nigeria

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Microfinance and Micro-Banking

• Ecobank is committed to providing the unbanked and underbanked with access to

finance.

• Ecobank has established microfinance joint ventures in Ghana, Nigeria and Cameroon

in partnership with Accion.

• We also have microfinance operations in Sierra Leone and Burkina Faso.

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Providing Access for Financial Inclusion

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The microfinance joint ventures have been established to:

• Facilitate financial inclusion of the unbanked and provide financial services to the low

income and un-banked through the most convenient and cost-effective channels

• Focus on the economically active business owners located within urban, and rural

areas that need financial services to expand their businesses

• Offer through an omni-channel network simplified processes, service delivery with

speed, competitive pricing, convenience and reliable services

Leveraging Technology Platform

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• Leverage on the Group’s strong technological platform and

expertise to deliver innovative banking products and services

wherever this target market is located

• Using technology enables the microfinance affiliates serve

clients through integrated network of branches and branchless

channels such as the ATM, POS, SMS and Mobile phone

banking; and

• Utilize strong in-house data mining and analytical tools that

provide information for risk-focused decisions in the areas of

management decision making, new product development,

profitability enhancement and customer satisfaction (speed and

convenience)

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Notable achievements through micro banking

• 131,562 Savers/businesses with total savings of

US$20 million were given the opportunity to save

and manage their funds through innovative, flexible

and value-adding deposit products

• Customers benefit from free business advisory

services provided by the field staff

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• The average savings balance is approximately

US$100; reflecting the resolve to serve the low

income segment

• 15,765 micro borrowers, including individuals and

entrepreneurs were supported.

• Loan sometimes as low as US$40 per facility. The

portfolio size as of December 2011 was $13 million

• 85 communities were reached with omni-channel

programme to make banking accessible

Partnerships

© Ecobank Capital 2011 | Mobilizing Regional Banks to finance infrastructure: What role for Regional funds syndication? | September 2011 18 18

• In addition to our retail operations, Ecobank

also supports other microfinance institutions.

• The main banking partner for many of the

leading microfinance institutions and

cooperatives in Middle Africa, with an indirect

reach to several million micro-clients.

• Partner with Bill and Melinda Gates

Foundation to promote savings culture with a

seed fund of $6 million

• Partner with Airtel to facilitate transfer of

funds

• Partnership with USAID

• Partner with Western Union to facilitate

remittances in addition to Ecobank Rapid

transfer and Diaspora Account

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Women in Business

• Ecobank has been involved in the Women in

Business (“WIN”) program sponsored by IFC since

2009.

• Led by two senior executives within the group, our

Vision is to be the FIRST CHOICE BANK for

women across Africa.

• Programs initiated in Benin, Cameroon, Cote

d’Ivoire, Niger, Nigeria and Senegal

• By focusing specifically on women, Ecobank aim to

promote and increase women access to finance;

reduce gender based barriers in the business

environment;

• Partner women professionals and women in other

leadership roles;

• Create opportunities for stakeholders in terms of

Business Development;

• Create a network of women in various endeavours

across Africa, thereby introducing and facilitating

inter-regional trade.

• Work closely with the IFC to develop the program.

Conclusions

Bankers and Parliamentarians as Partners

• Policy makers can provide the platform for supporting financial inclusion for the

Bottom Billions

• Banks allied with policy makers can improve access to financial services through

innovation, education, and technology

• Ecobank has been building a truly pan-African Bank with the scale and scope to

provide financial inclusion for the bottom billions through appropriate access and

availability; and pricing and affordability.

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Thank you

Questions