“Financial inclusion in Nigeria requires a lot of fintech” – Bank of Industry CEO

Transcript

The Bank of Industry is Nigeria’s oldest, largest and most successful development finance institution. Over the past six years, it has provided financing to over four million businesses, helped create more than seven million jobs and diversified Nigeria’s economy beyond dependence on the volatile oil and gas industry. BOI’s Managing Director and CEO is Olukayode Pitan – he explains the role Bank of Industry can play in improving financial inclusion, how the bank supports women and young entrepreneurs, and the role home-grown fintech plays in the bank’s transformation mission. You can also watch the first half of this interview, where he discusses that assignment in more detail.

World Finance: I want to talk to you about financial inclusion, which continues to be a challenge in Nigeria; what is the role of development finance institutions like BOI in addressing this issue?

Olukayode Pitan: Central Bank of Nigeria, one of the things they want to do is to ensure that we have over 90 percent inclusion. Financial inclusion in Nigeria requires a lot of fintech. But BOI has been able to develop a platform that leverages technology, big data, biometrics and having physical agents on the ground.

The government is using this platform to distribute NGN 75 billion – about $160-170 billion, through BOI, to about 1.2 million people. The same platform is now being used for the World Bank program to alleviate poverty caused by the coronavirus. Thirty out of 36 states in Nigeria use us. We have reached millions of people; in fact that platform won an award recently. So that’s what we do to promote financial inclusion.

World Finance: You have products specifically aimed at underserved groups – for example women and young people. Walk me through the work that BOI is doing here.

Olukayode Pitan: Most of the small businesses we have in Nigeria are actually owned by women.

What we have done at the Bank of Industry is to create a gender group, aimed at women and women-owned businesses. Because most lenders, they did not want to lend to women. But lending money to women is good business! For one, when you look at the ratio of repayment—women versus men—women do much better. And then when you give money to the women, the whole family benefits.

Nigeria also has a lot of youth. Many of them do not have security, because they are just leaving school. So we take a risk on these young people, who have an entrepreneurial spirit. We can see what they want to do, they can borrow money in the single digits from the bank. So we are innovative in financing the areas where there is a need.

World Finance: The bank has become an official signatory to the UN principles for responsible banking; How do you incorporate this firm commitment to sustainability into your business?

Olukayode Pitan: One of the first things we did was to ensure that our employees were trained, so that we could actually do what we signed up for.

For new customers who approach the bank, we want to ensure that what we finance is responsible, we are not going to create more problems for the environment.

We will also help customers that we have already financed to make this transition to ensure that they will reduce their carbon emissions.

World Finance: As industry becomes increasingly automated or digital first, how do you stay on top of technology trends to ensure you can continue to deliver this important work into the future?

Olukayode Pitan: Most of what we do is digital. For example, we raised $1 billion in March 2020 and €1 billion in December 2020: all done virtually and online.

So the platforms are there. They are good. But you also need good people. And now there is a problem! Because their skills are in demand all over the world.

So we designed a product to invest in fintech, putting in $18 million of our own resources. It is going to be a fintech fund of 75 million dollars. We also build technology hubs. We have built 10 as part of our social responsibility. There are four in progress. But the goal is for every state in the country to have a technology center donated by the Bank of Industry.

In Nigeria today, there are some companies that have become unicorns. They were small Nigerian companies that are now playing in the world sector and they are worth over $1 billion. There are many more smart Nigerians who can create businesses that can become unicorns in the future. We are part of that dream.

World Finance: Mr Pitan, thank you very much.

Olukayode Pitan: Thank you very much.