‘Financial inclusion in Nigeria requires a lot of fintech’ – Bank of Industry CEO
BOI's tech platform helped the Nigerian government distribute $160m to 1.2 million people during the pandemic
Bank of Industry is Nigeria’s oldest, largest, and most successful development finance institution. Over the last six years it has provided financing to over four million enterprises, helping create more than seven million jobs, and diversifying 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 that Bank of Industry can play in improving financial inclusion, how the bank supports women and young entrepreneurs, and the role that home-grown fintech is playing in the bank’s transformational mission. You can also watch the first half of this interview, where he discusses that mission in more detail.
World Finance: I want to talk to you about financial inclusion, which continues to be a challenge in Nigeria; what role do development finance institutions like BOI play in addressing this issue?
Olukayode Pitan: The Central Bank of Nigeria, one of the things they want to do is to ensure 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 uses that platform to distribute NGN 75 billion – about $160-170bn, through BOI, to about 1.2 million people. That same platform is what is being used now for the World Bank programme to alleviate poverty caused by the coronavirus. Thirty of 36 states in Nigeria are using us. We have reached millions of people; in fact that platform won an award recently. So that is what we are doing to promote financial inclusion.
World Finance: You have products specifically targeting under-served groups – women and young people, for example. Talk me through the work that BOI is doing here.
Olukayode Pitan: Most of the small businesses that we have in Nigeria are actually owned by women.
What we have done in Bank of Industry is to create a gender group, catered to women and women-owned businesses. Because most lenders, they didn’t want to lend to the women. But lending money to women is good business! Because 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.
Also, Nigeria has a lot of youth. Many of them don’t have collateral, because they’re just leaving school. So we take risks on these young ones, who have the entrepreneurship spirit. We can look at what they want to do, they can borrow money at single digits from the bank. So we are being innovative in financing the areas where there’s need.
World Finance: The bank has become an official signatory to the UN Principles for Responsible Banking; how are you incorporating this firm commitment to sustainability into your operations?
Olukayode Pitan: One of the first things that we did is to ensure that our staff are trained, so that we can actually do what we have signed up to do.
For new customers that approach the bank, we want to ensure that what we are financing is responsible, we’re not going to create more problems for the environment.
We’re also going to help customers that we have already financed to have that transition to ensure that they are going to reduce carbon emissions.
World Finance: As industry is becoming increasingly automated or digital-first, how are you staying on top of technology trends to ensure that you can continue delivering this vital work into the future?
Olukayode Pitan: Most of the things that we do are digital. For instance, we raised $1bn in March 2020, and €1bn in December 2020: all done virtually and online.
So the platforms are there. They’re good. But you need good people too. And that’s now a problem! Because their skills are required all over the world.
So we have designed a product to invest in fintech, putting $18m in of our own resources. It’s going to be a fintech fund of $75m. We are also building tech hubs. We have built 10 as part of our corporate social responsibility. There are four that are ongoing. But the target is that every state in the country, we have a tech hub donated by Bank of Industry.
In Nigeria today there are some companies who have become unicorns. They were small Nigerian companies that now are playing in the world sector, and they are worth over $1bn. There are many more smart Nigerians who can create businesses that can become the unicorns in the future. We are part of that dream.
World Finance: Mr Pitan, thank you very much.
Olukayode Pitan: Thank you very much.