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Roshika Singh and Sylvester Ogbakiri
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... micro- and SME finance, leasing, credit information systems, value chain ... Expanded lending to include auto finance, leasing and mortgage finance, other ... – PowerPoint PPT presentation
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Title: Roshika Singh and Sylvester Ogbakiri
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Deloitte and EMG Helping Banks Unlock the
Profit Potential of Small and Medium Enterprises
- Roshika Singh and Sylvester Ogbakiri
- Workshop on Technical Service Provision for MSMEs
- Eko Hotel and Suites, Victoria Island
- June 28th, 2006
2
Todays Discussion
- About Deloitte and Emerging Markets Group, Ltd.
- Our Work in MSME Finance
- Potential Approaches to MSME Finance in Nigeria
3
Deloitte At A Glance
- One of the worlds largest and fastest-growing
professional services firms - Expertise in audit, tax, Consulting and Financial
Advisory Services. - More than 90,000 professionals in over 130
countries - More than 25 of global revenues from serving
financial institutions - Global expertise in lending technologies, payment
systems, small business finance, mortgage
lending, capital markets operations,
securitisation, Basle II compliance, anti-money
laundering, etc. - Recognised as the organisation that believes in
and can deliver seamless, integrated
professional services (Emerson Review, 2004)
4
Akintola Williams Deloitte in Nigeria
- Largest locally-owned accounting and audit firm
in Nigeria - Founded fifty-two years ago by now retired
Akintola - Expertise in corporate finance, enterprise risk
services, due diligence, merger integration,
accounting, tax, audit and consulting services - Worked with fifteen financial institutions in
Nigeria over last five years - Consulting arm engages in project management,
information technology, human capital, energy
infrastructure and utilities, operations and
strategy services as well as economic studies - Corporate Finance Unit provides first-class
services in due diligence and business valuation - Enterprise Risk Services Unit deals with Business
Risks and Corporate Governance matters, which is
usually an important issue for financial
institutions.
5
Our Work in Nigeria
- Nigeria Helping BPE manage technical assistance
for DFID - Nigeria Establishing linkages with water
associations and fund management - Nigeria Funds management for census for
European Union - Nigeria Funds management for immunization for
World Health Organization - Nigeria Conducted due diligence services for
EIB International Bank Plc - Nigeria Conducted due diligence services for
Bond Bank Plc - Nigeria Conducted due diligence services for
Reliance Bank Plc - Nigeria Provided merger integrations and
advisory services to Skye Bank Plc - Nigeria Conducted due diligence services for
Magnum Trust Bank Plc - Nigeria Conducted due diligence services for
Nal Bank Plc
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Our Work in Nigeria / South Africa
- Nigeria Conducted due diligence services for
NBM Bank Plc - Nigeria Conducted due diligence services for
Trust Bank of Africa Plc - South Africa First Rand Bank Limited
Establishment Of A New Micro-Finance Division - Nigeria Conducted due diligence services for
Afro-Exim Bank Plc - Nigeria Conducted due diligence services on
Assurance Bank for NSITF - South Africa Regional Fund Managers
Financial Deepening Challenge Fund - Zimbabwe Reserve Bank of Zimbabwe
Establishment of A Depositor Protection Scheme
For Zimbabwe - Nigeria Provided pre-merger advisory services
to Sterling Bank Plc - Nigeria Provided pre-merger advisory services
to Skye Bank Plc
7
EMG At A Glance
- Twenty years as Deloittes specialised
development consulting unit - 200 staff in London, Washington, Brussels and
projects around the world - Clients include World Bank, DFID, USAID, EU,
African Development Bank, and state-owned and
private commercial financial institutions - Now independent, but associated with Deloitte and
still retain strong links with Deloitte
particularly across African continent - Dedicated practice units in financial sector
development, agribusiness, health care, tourism,
private sector development, and public sector
reform - Expertise includes micro- and SME finance,
leasing, credit information systems, value chain
finance, housing finance, capital market
development, AML, financial sector regulation,
pension reform, etc.
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Our Work in Africa
- Nigeria Helping Bureau of Public Enterprises
manage technical assistance - Nigeria Helped ECOWAS upgrade financial
management capability - Nigeria Reviewed operations of Plateau State
Water Board - Benin Worked with financial institutions to
develop loan products for SMEs - The Gambia Assisted in preparing a Tourism
Master Plan - Senegal Conducted public finance review for MCA
Jumpstart programme - Cameroon Provided regulatory assistance to the
Financial Markets Commission - Zambia Designing training program in SME
lending for commercial bankers - Swaziland Conducted assessment of financial
sector, measured SME access - Other projects in Ghana, Botswana, Kenya, Uganda,
Tanzania and Ethiopia
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Todays Discussion
- About Deloitte and Emerging Markets Group, Ltd.
- Our Work in MSME Finance
- Potential Approaches to MSME Finance in Nigeria
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Selected Experience in MSME Finance
- Bank training in Thailand and Zambia
- SME banking in Kosovo
- New product development in Honduras
- Bank diagnostics in Tanzania
- Fisheries and agriculture banking in Kenya
- Credit reporting and information systems in
Zambia, Madagascar, Egypt, East Timor, Mexico,
Colombia, Brazil and Uruguay
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Bank Training in Thailand and Zambia
- Designed tailored training courses for six banks
in Thailand, with funding from USAID and
commercial banks - Delivered separate programmes at each
institution, including private and state-owned
banks, ranging from 1 day to 3 weeks - Topics included SME lending, credit and
operational risk management, loan workout - Also trained potential SME borrowers on bank
requirements, how to complete applications - Trained over 1,000 bankers, achieved measurable
results in skill levels - Now conducting a training needs assessment for
bankers in Zambia to unlock profit potential
among SMEs and agribusinesses
12
SME Banking in Kosovo
In 2001, EMG launched a 30 million lending
facility for SMEs in Kosovo, funded by USAID. We
then received a banking license, began collecting
deposits and operated a full-service commercial
bank. After several years of profitable
operation (based on SME lending), we sold the
bank to Raiffeisen Bank of Austria.
- Selected or developed all IT and MIS capabilities
- Recruited and trained 250 staff, for all
deparments - Disbursed 2,400 loans mostly to SMEs worth
65 million, with loan losses under 3 - Adapted microfinance best practices to SME
lending - Profitably cross-sold fee-based services to SMEs
- Expanded lending to include auto finance, leasing
and mortgage finance, other specialised products - Rolled out ATMs, kiosks and mobile banking units,
opened 17 branches - Created 22,000 new jobs through loans to SMEs.
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Other Successes in MSME Finance
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Our Work on Credit Reporting Systems
- Zambia Working with Central Bank to revise
legal framework and attract a privately-managed
credit bureau - Madagascar Working with Financial Services
Commission to design and establish a credit
information system for microfinance institutions - Egypt Helped Central Bank strengthen and expand
public credit registry to include smaller loans,
worked with commercial banks to improve data
security, accuracy and relevance as well as
consumer protection. - East Timor Designed and now helping to
establish a public credit registry for commercial
banks, NBFIs and microfinance institutions - Latin America and the Caribbean Working with
the World Bank and the FIRST Initiative to
evaluate and strengthen public and private credit
information systems in Colombia, Brazil, Mexico,
Uruguay, Costa Rica and Trinidad Tobago
15
Todays Discussion
- About Deloitte and Emerging Markets Group, Ltd.
- Our Work in MSME Finance
- Potential Approaches to MSME Finance in Nigeria
16
MSME Lending in Nigeria
- 65 of economically active population have little
/ no access to finance - Less than 10 of some 8.4 million MSMEs have
access to finance - SME lending accounts for less than 9 of total
bank credit
Implications
- Vast potential market for SME finance, with
little competition so far - High profit potential SME customers less price
sensitive than large firms - Massive potential first mover advantage
- But managing risks and reducing transaction costs
are key challenges
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How EMG and Deloitte Can Help
- Manage risks and reduce transaction costs
associated with SME lending
- Work with commercial banks
- Strengthen credit analysis and risk management
practices - Design, test and launch new credit products for
SMEs - Streamline lending procedures to reduce
transaction costs - Identify and implement cross-sell opportunities
to improve SME profitability - Work with SME borrowers
- Provide training on accounting and reporting
- Assist with completing loan applications
- Build linkages and offer other business
development services - Work with Government and other stakeholders
- Improve credit reporting and information systems
- Help improve policy and enabling environment
- Facilitate equity investments, credit guarantees
and other forms of finance
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For more information
- Sylvester Ogbakiri
- Email sogbakiri_at_deloitte.com
- Email sogbakiri_at_awdeloitte.com
- Phone 234 (0) 803 300 6806
- Roshika Singh
- Phone 44- (0) 20 7303 2288
- Email rsingh_at_emergingmarketsgroup.com
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about planning for the future
- If you are planning for a year, sow rice
- If you are planning for a decade, plant trees
- If you are planning for a lifetime, educate
people - - Chinese Proverb
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Thank you Very much!
Questions??
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