In this interview with reporter FRANCIS KAJUBI, AccessBank Tanzania CEO ARMANDO MASSIMILIANO SIROLLA (pictured) discusses this achievement and sheds light on the opportunities and challenges of running a bank in a country like Tanzania. Excerpts…
QUESTION: What was the special thing that enabled AccessBank Tanzania to emerge tops in an industry with more than 40 commercial banks? And what is your take on this achievement?
ANSWER: AccessBank has been in Tanzania for more than a decade and over the years we have established a reputation for excellence and speed. With us, entrepreneurs across Tanzania have prospered and grown. This is because they have been able to access financial services specifically tailored for small and medium businesses.
We have clients that started with us 11 years ago with small loans of a few hundred thousand shillings, and today they borrow from us hundreds of millions of shillings, because their business has grown with us. In addition, over the past few years we have enabled a strong digitization strategy with a focus on mobile financial services and a solid agent network.
For all of these reasons we believe that the judges saw in AccessBank a catalyst for social and economic development as well as a vision for a long-term strategy here in Tanzania.
Q: And why should one opt to bank with AccessBank?
A: AccessBank has a wide range of products and services, excellent customer service, speed in delivering what is needed to our clients, and in addition to that we have very strong shareholders.
These include AccessHolding, a private company based in Berlin Germany; the International Finance Corporation (IFC) which is a part of the World Bank Group; KFW, a German development bank; the African Development Bank (AfDB); and MicroVest, an asset management firm based in the US.
Q: How do you describe 2018 in terms of your organisation’s banking service delivery?
A: As part of our 2018 service delivery we rolled out a new account dubbed Lulu that was tailored specifically for those women achievers who plan for the future.
Last year also saw AccessBank run the ‘Doing Bigger Business Together Campaign’, where our clients can access larger loans of 1 billion/- and more with a faster loan processing time. We introduced Credit Life Insurance on our loans, as there was a need to reduce the burden of the loan on family members in case of death or permanent disability.
We also introduced the much anticipated Masterpass QR service by MasterCard, and it has done very well in simplifying the movement of cash and convenience of spending wherever and whenever.
Q: To what extent did the bank meet its targets and implemented the strategic plans it had for 2018?
A: 2018 was a challenging year for the banking sector as a whole and for AccessBank as well. We have managed to achieve the objectives that we established at the beginning of the year, and to do a lot of necessary groundwork to render the bank more versatile in the future. Nonetheless, we still need to improve on our financial performance.
Q: Comment on the bank’s survival strategy in the highly competitive Tanzanian market.
A: AccessBank has always been focused on developing Tanzanian businesses and their families, especially SMEs. Therefore, this country having such a vibrant entrepreneurial spirit, it has been easy for us to survive.
In addition to that, the fact that we have solid international shareholders and an excellent track record of service and speed has allowed us to survive in an extremely competitive market.
Q: Please shed some light on how AccessBank is coping with the financial technology (fintech) adoption and its uptake by the country’s banking sector at large.
A: We have progressed rapidly and this is the trend. I can say this because in 2017 AccessBank was awarded the judges choice award at the GSMA Mobile Money Hackathon 2017. Mobile Money Hackathon is part of a series that also took place in Asia, Latin America and Africa with the purpose of raising awareness, demand and speeding up implementation of the mobile money industry application programming interface (API).
Various developers in the financial services industry, including banks, aggregators, payments switches, and start-ups, had to build solutions for a harmonized API use.
The APIs were jointly designed by key stakeholder’s mobile money providers, platform vendors, third party service providers, and industry partners, combining best practices in the technology industry with the aim of reducing integration time and complexity within the industry today, as well as to limit and avoid fragmentation in the mobile money ecosystem. In short, AccessBank is a huge contributor in terms of fintech services.
Q: Has AccessBank been affected in any way by the central government’s decision to withdraw all public entities money from commercial banks and have it deposited at the Bank of Tanzania?
A: No we have not been affected as our exposure in that regard has been very limited.
Q: What was the situation of non-performing loans at AccessBank in 2018?
A: In 2018, the bank instituted additional measures and tools to improve the overall credit risk management. This was in addition to those recovery strategy measures proposed by the regulator. All these aimed at responding to the challenges in the deterioration of credit portfolio.
AccessBank was not exceptional… we also experienced the same deterioration internally as was the case for other players in the banking industry. We are positive that these instituted measures and strategies will continue to gradually contain the situation from 2019 and going forward.
Q: How did AccessBank grow in 2018?
A: In 2018, the bank increased its paid-up capital by 7 billion/-. The bank also registered a number of positive achievements including increases in the number of users of alternative channels (namely agents and mobile banking).
We also managed to widen our service delivery via Masterpass QR in partnership with MasterCard. In 2018, we managed to widen our customer-centric engagements through a number of business forum sessions in all zones, different from prior years.
Q: What should the banking public expect from AccessBank in 2019?
A: For 2019, we have great products and services coming out, and as usual we will improve further our customers’ digital banking experience. 2018 was a year where we put weight on good customer relationships, and 2019 will be even better as we plan to invest more time with our customers. There is a lot in store, which I cannot give away right now… you just wait and see.