Helping a Nigerian bank break into microfinance
Microfinance plays a significant role in micro, small and medium enterprise (MSME) development.
Providing working capital helps low-income micro and small enterprises to invest in and expand their operations, contributing to economic growth and employment. Despite this important role, 65% of the market is served by the informal financial sector where financial services are expensive and quality is not guaranteed. This means there is a significant opportunity for banks to leverage their institutional capacity and regulated lending practices in the microfinance market to provide a better offering.
However, providing this offer requires banks to upskill their staff, consolidate their MSME credit scoring methods and technology, and design marketing strategies for the segment.
Genesis Analytics partnered a large Nigerian bank entering the microfinance sector to refine its strategy and capabilities.
To address the bank’s institutional capacity deficit, Genesis helped develop an operations policies and procedures manual to strengthen the skills of the bank’s staff in microfinance operations at the corporate and branch levels. We also assisted in implementing the manual by identifying the specialised type of training and capacity building that was necessary to enforce the relevant changes.
Next we helped the bank identify its operational shortcomings in a number of areas which required further enhancement to successfully cater to microfinance segments. These ranged from the product offerings (lending and deposit) to the loan application process, marketing, sales, credit analysis, scoring modules, financial forecasting and support activities. Having identified these shortcomings, we offered recommendations based on international best practice standards on how the bank should improve.
Lastly, Genesis helped develop a high performance culture in the bank by designing a system that tracks product and staff performance against lending targets, and provides a portfolio monitoring tool.
Genesis equipped the bank with the capabilities and information required to successfully operate in Nigeria’s microfinance sector, and in so doing contributed to the key issue of MSME financing.