NPF Microfinance Bank will transform to deposit money bank by 2024 – MD

In this interview, the Managing Director of NPF Microfinance Bank Plc, Mr. Akinwunmi Lawal, spoke on plans of the bank to transform into a full-fledged deposit money bank by 2024 and the recent expansion drive into some parts of the North. Except:

How do you assess the judgment that NPF is basically a police bank?

NPF Microfinance Bank Plc as the name implies is a publicly quoted liability company in the stock market and its shares are open to the public and not to the officers and men of Nigeria Police Force alone. It’s a complete business enterprise that is out to give unique financial services to the Nigerian public.

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Our opening of branches is not confined to a police environment; we are in market places, we are on Facebook and Instagram, we have expanded our reach-out on the social media platforms for people to know.

Most importantly, our account opening model is also very apt through our USSD. We are open to the general public as well as our primary constituency which we are also jealously guarding, the police institution. So it is open to the  masses.

We have seen the emergence of wholly online banks which are strong competitors to your likes, how would you assess the market?

Through IT and fintech, there are strong competitors to the banks and financial inclusion has been strengthened and improved, a number of people are now financially literate and can open accounts.

When it comes to advancing facilities I think we need to be extremely careful so we do not create a situation where we have allowed some people to be getting to a point where they cannot meet their obligations.

Some people just borrow for consumption; you must have an expectation and a means where you would be willing to put that money into productive capacity.

How to pay back must be a factor that each institution must put in a strong credit appraisal system to ensure that if we have that in house facility that we are granting to customers they should have that capacity to pay.

What is the level of investment in IT to ensure effective service delivery?

There are no two ways about it. Today, it is information technology and fintech that can drive your business and you have to grow the number; when you grow the numbers the profit will definitely come because it is through the number that you will earn free income no matter how small.

With social media platforms, we’re actually growing the number by the day and a number of people have embraced the various platforms – the USSD platform, the mobile app platform in opening accounts – and then in  running creative activities.

Banking is about service, so inasmuch as you can provide that service delivery effectively and efficiently, definitely the income would trickle in and cover your cost effectively and some reasonable margin for your stakeholders.

How would you describe your public offer early this year to raise funds from the stock market to meet recapitalization requirements?

We concluded that way back in February and it was successful. It was actually 105 per cent oversubscribed. For the oversubscription the money was returned to those we were unable to allot as a result of oversubscription. The money was returned to the subscribers. We have adopted that in our books: we’ve been able to grow our capital base from N5.8 billion to about N10.8 billion as a result.

We were able to rake in as much as N5 billion from the capitalization; it was actually a success by all standards and we are adequately capitalized.

For a national MfB, the capitalization level is N5 billion but we are over N10 billion, about N10.8 billion. We are over capitalized for the sub sector we have been.

We have a dream that in the next three years – by 2024. We want to transform it into a deposit money bank (DMB). It is part of the growth mission towards raising a N25 billion capitalization for a DMB. We recapitalized to achieve three major things: to improve on our information technology; increase our branch network and increase our working capital.

Despite insecurity in some parts of the North, the bank recently expanded by opening branches in such areas…? 

The bank, in her quest to serve the public, has opened branches in many states with about 32 branches and is still planning to open more. The recent branch was opened in Borno State where the governor was so excited and encouraged people to come out and patronize NPF Microfinance Bank Plc.

Banking services would give the people a sense of belonging and I think much is being done to ensure that peace returns to all those areas. Whichever way you look at it, they are Nigerians, they are human beings and they also need financial services.

To encourage people to come and serve, the governor of the state made a pronouncement of N100 million; N50 million to be deposited in the bank, N30 million to be given as loan to deceased police officers’ families; N25 million as scholarship or award to children of deceased officers.

Tell us about the A- and BBB+ rating your bank bagged recently?

For any institution that is worth its salt, it will want to know its value and perception. And then professionally, for stakeholders generally to understand the bank’s standing in the eyes of the public.

So when you score A- which is what we had from Augusto, Triple B+ from GCR and these are investment grade and for a microfinance bank to attain that level, it shows that the MfB is solid, well managed and has capacity to honour its obligations any time.

Invariably, what it means is that having subjected ourselves to these ratings, investors all over the world will have confidence and believe that this is an institution they can entrust their money with and go to sleep.

All parameters and economic indices that make an organization stand the test of time, this institution has passed it. So investors can put their money here.