Download - Microfinance Bank Proposal Ajiboye

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Training, Management and Legal Consulting.

#P.16, Suite 3, Oko-Oba IV Estate, Abule Egba, #N0.47, Mojisola Street, Ogba, Lagos. +234 (01) 8755 830, +234(0) 803 217 5065

[email protected] [email protected]

Content: 1. Executive summary

2. Overview of the OFIS & the National Policy On Microfinance

3. Benefits of Microfinance Bank

4. Product focus

5. Acquisition Process

6. Basic Organisation Structure

7. About Us

1. Executive Summary

In line with the new National Policy on Microfinance and the reforms on the Other

Financial Institutions Sub-sector by Central Bank of Nigeria, Feniran Consult wish to

submit hereby the proposal (the feasibility and business plan) for your consideration of

the need to invest in a Microfinance Bank, the main objective being the provision of

needed financial services to the micro customers in particular and to Nigerians in

general.

Microfinance bank; unless otherwise stated means a person or company licensed to carry

on the business of providing financial services such as savings, loans, domestic fund

transfer, business development and financial services.

Capital Base

For a Nationwide MFB, N2b is required. To operate in a state N100million is needed

while a unit/local government MFB is N 20m.

2. Overview of the OFIS Subsector & the National Policy on Microfinance

The attainment of the new millennium development goals has put on the front burner to

give focused emphasis on poverty reduction through the empowerment of people,

provision of needed infrastructural facilities and the promotion of small enterprises

(SMEs). The provision of microfinance services is therefore key to activating the latent

capacity of the economically active poor for entrepreneurship, self reliance, and the

enhancement of household income with its concomitant implication for national wealth

creation. This is the background of the new national policy on Microfinance launched by

the President in 2005.



The prolonged sub-optimal performance of existing community banks in Nigeria is

common knowledge. The factors responsible for this include weak institutional capacity,

weak capital base, perversion of business model and other governance issues. In the end,

the community banks became another level of universal banks with smaller capital.

Studies show that in Nigeria, the formal financial system provides services to about 35%

of the economically active population while the remaining 65% are still excluded from

access to financial services. Theses 65% are often served by the informal sector through

NGO-MFIs, moneylenders, relatives and credit unions. The non-regulation of the

activities of these institutions has serious implication for the Central Bank of Nigeria’s

ability to exercise one aspect of its mandate of promoting monetary stability and a sound

financial system. Under the new National Policy, existing community banks, NGO-MFIs

and all such other microfinance institutions hitherto in the informal sector, who desire to

practice microfinance business in Nigeria, were expected to migrate/transform to

Microfinance banks to be licensed by the Central Bank of Nigeria.

All these led to establishment of Microfinance Bank in 2007.

3. Benefits of Microfinance Bank to the general public

Provide accessible consumer / retail banking services such as savings

and demand deposit accounts, funds management, salary accounts, local

money transfer and soft loans

Provide diversified, affordable and dependable financial services to the

economically active poor, in timely and competitive manner, that would

encourage long-term, sustainable entrepreneurial activities;

Mobilize savings for intermediation;

Create employment opportunities and increase the productivity of the poor

particularly within its catchment area, thereby increasing their individual

household income and uplifting their standard of living;

Enhance organized, systematic and focused participation of the poor in

the socio-economic development and resource allocation process; through

specialized customer education and enlightenment;

Provide veritable avenues for the administration of the micro credit

programmes of government.

Typical Cash flow Projections

Break Even Point

The breakeven point is contingent upon the interest rate charged on

transaction, the amount invested and quality of management.



Since they offer mainly microcredit they cover their cost of transaction

quickly as returns on micro businesses are generally higher with faster

turnaround time.

However, breakeven point is usually between 6 to 12 months.

a. Microfinance Bank-3years Post Breakeven with N 20m paid up capital

Year Year Year

Year ended 31st Dec. 2012 2013 2014

Profit before Taxations 6,000,000 8,500,000 12,000,000

Profit after Taxation 5,000,000 7,500,000 10,000,000

Dividend (proposed) 30% 1,500,000 2,225,000 3,000,000

Forecast Derived per share 7.5 11.25 15.5 Average: 34.25

b. Commercial Bank-3years Post Breakeven with N 25bn paid up capital

Year Year Year

Year ended 31st Dec. 2012 2013 2014

Profit before tax 3.125b 4.427 6.560b

Profit after tax 2.187b 2.877b 4.062b

Dividend (proposed) 30% 656m 863m 1218m

Forecast Dividend per share 2.63 3.45 4.87 Average: 3.65

Microfinance bank has far more dividend per share as compared to commercial bank

even with a capital investment that is 0.08% of the commercial bank the microfinance

returns is on the average 938% higher.

Apart from Dividend payable to shareholders individual customers with their various

deposits or placement cannot get less than 15%P.A. returns on their deposit.

4. Product Focus

To achieve the above objectives, the MFB shall develop product offerings along the

following service lines unless otherwise restructured by the owners/stakeholders.

1. Agriculture

2. Commerce

3. Medium- enterprises (entrepreneurial support, business advisory and life after

service business planning etc.)

4. Consumer / Corporate Finance

The product offerings are as follows:

1. Financial Advisory Services:

- Business development services



- Feasibility Analysis

- Project Finance – Consultancy

- Debenture Service as Approved

2. Lending:

- Group / Solidarity based lending model (not necessarily Asset - Collaterised

Financing) for micro-credits

- Equipment Leasing

- Project Finance

- Hire Purchase

3. Treasury / Deposit Liability Management:

-Guarantees

-Money Market and Funds Management

4. E-Banking:

-Electronic transfer

-Mobile money

The product offering listed above is not exhaustive and products shall be developed to

address the specific requirements of particular customer or group. In addition, as

market opportunities permit, the MFB’s product focus can be reviewed from time and

expanded in line with changes in the financial service industry. This shall be in line with

CBN approved guidelines.

Acquisition/Investment Process:

2) This can be done via Memorandum of Understanding (MOU) between the old and

new investors after carrying out due-diligence exercise on the bank’s financials.

9. Basic Organization Structure

The bank will operate 3 Group levels, and other team for effective management.

The structure is designed to permit proper segregation of duties.

The staff of the bank along the mentioned functional business units for the first year of

operation is given below.

(a) COO

(b) 3 H. O. D.s – Opps/Branch, Fin & Admin, Credit & Marketing

(c) 1 Cash officer

(d) 1 Cashier

(e) 1 Customer service

Based on the proposed staffing, the bank will require for the first year of operation 7

officers categorized as follows:



Level Position Number

Executive Management CEO & Group Heads 4

Officers Management 3

Total 7

This staffing plan excludes support staff such as driver and security officers.

12. About Us.

FENIRAN CONSULT is a Nigeria registered consulting firm with special focus on

Training, Business Support, Management and Legal Consulting.

Vision:

To be a leading Multidisciplinary African Consulting Firm providing innovative bespoke

solutions and services.

Mission:

To be a service provider of choice, delivering Training, Consulting and related services

solutions, adding value to our clients and other stakeholders in an efficient, cost effective

and reliable manner.

Core Values

Customer Focus, Integrity, Innovation and Service Excellence.

Our Offerings

Legal Consulting:

Our legal services include Advisory Services, Relationship Structuring, Corporate Affairs

Issues (Incorporation, Searches, and Trade Marks and Patents etc.), Litigation Advisory

Services, Property and General Legal Documentation. We have experience in

International Franchise Arrangements, Technology Transfer and Guarantee

Procurement.

Business Support and Advisory Services:

We are proficient in Product Development, Scenario Planning, Relationship Structuring,

Business/Marketing Strategy advisory services.

Our services also include;

a. Recruitment and management of outsourced staff

c. Management/administration of clients’ existing support staff

d. Business take-off planning and implementation



Management Consulting and Training:

We undertake HR Planning, Recruitment service, Background Checks and related

advisory services. We have experience in Leadership, Strategy, Team Building, Public

Speaking, Sales, Marketing, Personal Effectiveness, Communication and Customer

Service training amongst others.

We support the management of significant Organizational Change.

Our associates have their background in Financial Services, Insurance, Medical,

Pharmaceutical, Engineering, Sales, Marketing, Operations Management, Human

Resources Administration and Legal environment of many top-class organizations in

addition to management education at major centres of excellence within and outside

Nigeria. See the brief profile of some of our associates.

Our Clients:

Our clients include, MTNN Employees Multipurpose Cooperative Society (MEMCOS),

Leadway -Pensure PFA, Unilever Nigeria Plc., Mother and Child Hospitals Limited,

Frontier Logistics and Cargo Handlers Limited , Blooms Soft Furnishings, Delsan

Engineering Services, Complete Designs and Engineering Services, Bible Society of

Nigeria, Naija Auto Trader And Investment Limited, Olutech Aluminium Limited etc.

Our Value Proposition:

We offer a unique one stop portfolio of Management Consulting, Training and Legal

Advisory Services. We harness the benefits of our varied industry/professional exposure

and training to deliver holistic and practical solutions to meet the needs of our esteemed

clientele.

Relationship is ongoing and engaging thereby affording us the opportunity to design and

deliver services tailored towards enhancing the attainment of our client’s strategic goals.

Specific Services Offered with Respect to this Proposal:

1. To assist you in midwifing the establishment of microfinance bank suitable for the

attainment of your set objectives.

2. Provide the required secretariat and process follow-up and represent your

interest from the beginning till completion of the process.

3. Structure/conceptualise initial start-up/take off structure and operational model

for successful realization of your set objective.

4. Prepare and finalise with regulators on your behalf all documentations, business

and operational plans



5. Produce business plan

6. Release to your control subject to agreement an experienced top rated

professionally active Microfinance banker to lead the initial take – off

7. Undertake recruitment and training off all staff

8. Undertake (subject to cost defrayment) all related administrative and legal

services

Our Approach:

It is our belief that no two clients are the same even if in the same industry and facing the

same challenges. Each client is unique to us and we do not pretend to have prepackaged

strategies or solutions.

We do not vend or amplify buzzwords and management fads and our plans/solutions are

developed with the client in view in order to make them executable.

We shall be grateful if granted the opportunity to be of service to you.

O.M. OLOJO Esq.

Senior Consultant/CEO.

BRIEF PROFILE OF KEY ASSOCIATES:

OLOJO, OLUYOMI MICHAEL.

A 1989 graduate of Law from Obafemi Awolowo University, Called–to-Bar on 12th

December 1990, Yomi Olojo has had a varied work experience from brief stints in

Citizens Rights protection as a Youth Corper, Legal Practitioner, Civil Servant, Business

Manager and Academia. He was the pioneer Legal Secretary to Irrua Federal Medical

Centre in Edo State of Nigeria.

A career rich in Human Resources Management as a business, he joined Servtrust

Limited a major Outsourcing and Security Service Company where he spent more than

five years becoming actively involved in project management, product development,

pensions, insurance procurement and claims administration. Before rising to the position

of Company Secretary and Legal Adviser he had been saddled with managing major

multinational, multi-location contracts including Nigeria Breweries and Diageo

(Guinness) Nigeria to name a few. It was from Servtrust Limited that he joined Leventis

Snacks Industries Limited as pioneer Admin and Human Resources manager. During his

brief stay at Leventis he set up the Medical Insurance, Pensions, Canteen, Security,

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Community and Police Relations system. He was also involved in NAFDAC approval

process for the products of the company.

In his thirst to acquire world class management training, Yomi Olojo secured admission

at the prestigious Lagos Business School for Executive Masters of Business

Administration (EMBA). The rigorous case study programme revealed his passion for

and brilliance in Strategy, Marketing, Ethics, Human Resource Management and

Business Law. Nicknamed Brownie for his ability to earn valuable points in-class before

the end of each course he was also the Elected Secretary General of EMBA 12. He joined

his class in attending the special one week training on Entrepreneurship and Competitive

Strategy at IESE Business School, in Barcelona, Spain.

As his post EMBA Internship, he joined Maevis Limited (Africa’s leading Airport

Automation and Management Company) as Executive Assistant to the Chief Executive

Officer. Maevis was a finishing school for Yomi in deals structuring, project proposal

drafting, marketing, reputation management, presentations, negotiation and training.

In his early fourties, married to Bolaji a former banker and business associate, this father

of three lovely girls is the CEO/Senior Consultant at FENIRAN CONSULT a Training,

Management and Legal Consulting Firm.

LUCKY O. OLOGBO

Lucky Ologbo is a Banker, Administrator, Teacher and Management Consultant.

Ologbo holds a Masters of Science (M.Sc) Degree in Business Administration with

specialization in General Management from University of Lagos and also an MBA

Degree in Banking and Finance from University of Nigeria Nsukka.

A student member of the Chartered Institute of Bankers of Nigeria; Institute of Personnel

Management of Nigeria and chartered Institute of Stockbrokers of Nigeria. He also

holds a full membership status (MNIM) of Nigerian Institute of Management.

Lucky has just passed the final stage of the professional examination (Microfinance

Certification Programme) conducted by the Chartered Institute of Bankers and Central

Bank of Nigeria for microfinance practitioner.

A banker to the core, his banking career which cut across Mortgage Finance Institution

(Safetrust Savings & Loans Ltd.) and Commercial bank (Access Bank Plc, Chartered

Bank Plc now Stambic/IBTC and Magnum Trust Bank Plc now Sterling Bank) spans over

16 years. At Safetrust (now owned by Sterling Bank), Lucky developed the Head Office

branch of the institution as pioneer branch manager and rose to the position of the

Group Head, Business Development and Mortgages.



In Chartered Bank, he participated in setting up of four branches located on Allen

Avenue – Ikeja, Awolowo Road - Ikoyi, Oke-Arin and Nnamdi Azikwe - on Lagos Island.

He was at various points in times, the Head of Credit & Marketing – managing other

financial institutions, (Community Banks & Mortgage Institutions) and Medium

Corporates. At the head office of the same bank (Chartered Bank) he was given the

opportunity of been a member of the Concessionary Finance Unit (World Bank Assisted

Projects – SME, IDF etc.)

He had a brief stay at Access Bank where he functioned very well at their Commercial

Department before joining Magnum Trust Bank Plc.He was the Manager in charge of

Magnum Trust Bank Plc Marina (Head Office) branch and Lewis Street branch, Lafiaji

Lagos before joining Royal Trust Community Bank Ltd. as the pioneer Managing

Director.

Lucky has just been recently inducted by the Chartered Institute of Bankers of Nigeria as

a Certified Microfinance Bank Practitioner of the Institute and now wears the title MCIB.

Mr. Lucky Ologbo is a member of Ikoyi Club Lagos and happily married with children.

MR. AFOLABI OBILADE.

Mr. Afolabi Obilade attended the Prestigious Government College, Ibadan and studied

Political Science at the University of Ibadan for a First Degree. He also obtained a

Masters Degree in Political Science at the same University (International Relations bias)

He is an M.B.A Graduate of top rated Durham Business School, United Kingdom where

he majored in HR Strategy.

Mr. Obilade is a graduate member of Chartered Institute of Personal Management

Nigeria and Licentiate Chartered Institute of Personal Development, UK.

Mr. Obilade started his career as an Administrative Officer with the Former

Directorate for Social Mobilization Bendel State; He worked with the defunct Center

for Democratic Studies BWARI Abuja (The Presidency) as a Research Officer/

Assistant. He later worked with the Institute Of Chartered Accountants Of Nigeria and

rose to the Senior Manager Administration

A Senior Human Resources Manager with over 12yrs experience in Human Resources

field, he has acquired experience over the years in Organizational Development and

Office Management with extensive knowledge in Training, Development and Talent

Management.



Mr. Obilade is passionate about driving efficiency and aligning HR to business strategy.

He is currently on a PHD research on Organisational Development at Bradford

University UK and a Consultant with the World Bank in Nigeria.

ADEDOTUN IFEBOGUN

Dotun is a banker of 19 years post qualification experience spanning commercial,

international and retail banking functions in professional banking environments in

Nigeria.

He has extensive practical experience in Branch Management, Trade Finance, Credit

and Risk Management, Product Development and Sales in Financial Services

environment.

He has been involved in successful start up and turn-around of branches, units and

department at various locations in the country. His core competences include credit

analysis, sales planning and execution and people management.

A graduate of Agricultural Economics from University of Ibadan, Associate Chartered

Accountant and Executive MBA holder from Lagos Business School, Dotun is a Senior

Management staff of a major Nigerian Bank.

BOLAJI MARIAM OLOJO

Bolaji started her primary education at the prestigious ADRAO International, Victoria

Island, Lagos before proceeding to Shepherdhill Girls High School. She completed her

Higher National Diploma in Mass Communication at Ogun State Polytechnic, (Moshood

Abiola Polytechnic) Abeokuta.

Bolaji worked at Waterstone Communications Limited as a Media Executive before

joining Chevron Nigeria Limited in 2000 as a Community Relations Officer. In addition

to host community activities she was a regular contributor to Chevron Texaco News. She

later moved to Punch Nigeria Limited on completion of her National Service as an advert

executive.

In 2002 she joined the Corporate Affairs department of Oceanic Bank International Plc

where she was for 5 years.



Bolaji was an active member of the highly successful Initial Public Offer campaign team

of the bank in addition to coordinating many Public Relations campaigns and events

management responsibilities.

She attended several courses including Communications, Branding, CSR, International

Trade, Writing, Winning Attitude and Poise before moving to Retail Banking department

as Pionner Head of Marketing at Iju Business Office of the bank before her exit from the

banking sector in 2009. BJ as she was fondly called led many initiatives including

Abattoir and Fishfeed Market Associations, Private School Account programmes and

Small/Medium Size Manufacturing Industry Account.

Bolaji is currently the head of Marketing and Corporate Services at FENIRAN

CONSULT.

Download - Microfinance Bank Proposal Ajiboye

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