Mr Hassan Usman, the outgoing Managing Director of Jaiz Bank, in this interview with Daily Trust, said the bank has funded the operations of 60,000 SMEs with over N60bn capital. He also spoke on how the bank raised its balance sheet to N300bn since it started operations 10 years ago. Excerpt:
Jaiz Bank just celebrated 10 years of existence, how has the journey been?
In these years, Jaiz Bank has grown from a 3-branch regional bank to a national bank with more than 45 branches.
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We started with a balance sheet of just about N12bn by end of 2012 to over N300bn by the end of 2021. We have consistently been growing at about 30 per cent over the last five years, and our profit before tax has grown by an average of about 40 per cent over the last four years. Our customer base has reached almost a million across all sectors—from SMEs to corporate companies, women’s groups and even micro businesses at the rural level.
We cover that spectrum because the bank came to appeal to everybody that is yearning to have non-interest banking.
It is important to note that for the last two years, we have been consistently paying a dividend. Though small, it is competitive. For our first dividend, we paid about N800m, but from the second one, each year we have been paying a billion after the AGM. The journey has been satisfying for all of us.
What is the bank doing to enable financial inclusion, as the bulk of the population is still not banked?
We have done quite a lot but I don’t think our financial inclusion is getting much publicity. This is one of my ideas and I wake up thinking about how it can be grown.
Our financial inclusion strategy is strictly for women in the rural areas. When we started in 2019, we had a 99 per cent recovery. But when the lockdown came, the capital we gave them, they used for other purposes instead of their businesses. It was just about N30,000 per head. There was a lockdown and that was what delayed the expansion of the pilot.
We were hoping that by this time we would have gotten to about 100,000 women. So, we had to wait to see the outcome of the COVID-19 so that we could build on it.
About two months ago, we had some kind of ceremony where we recognised the best of the women. We gave them some gifts and we asked the community to celebrate them. They were about 60 because since we started, over 3 years ago, they consistently paid back.
It was not just to give them financing but also an educational platform because when they come to the branch, at least once a month, they have to come back. This is not a loan but an equity to show what they did with the money, disclose the profit they made from it and we share it. We also made takaful (insurance) for them so that if there is any accident like fire or business issue, it will cover at least N100,000 per head.
What we wanted was that if we had 100,000 to 250,000 women in that group, then we will have an ecosystem where we can invite the international community to build some support system on it.
But we are still committed and the incoming MD will understand the importance. God willing, we will expand it once we cured all the issues and that is a learning point from the COVID-19 period.
What are the sectors you have been financing?
We have been financing many sectors, including housing delivery, agriculture, commerce and manufacturing, that are very important to the growth of the economy. Very importantly, we have increased financial inclusion.
We are able to work with people at the bottom of the pyramid very well for them to have little capital that changed their lives and their families’.
We have been very successful with SMEs; we have worked with over 60,000 of them and disbursed more than N60bn in terms of facilities to them, which has increased their capacity not only to do their business but to employ more hands.
Overall, these 10 years have been promising, and we look forward to the next 10 years with a lot of expectation.
We have also seen entrances in the Islamic banking space; will that change anything as far as your prospects are concerned?
For me, that is one of the achievements for Jaiz, because it is the one that made the federal government to venture into financing based on Islamic financing. It was able to build thousands of kilometres of roads using Sukuk and over half a trillion has been raised since Jaiz came on board.
The other banks came on because Jaiz pioneered this and did the labour and now the industry is ready for take-off.
We need them also to collaborate as Jaiz can’t operate as the sole institution doing non-interest banking in Nigeria; it needs more institutions and that demonstrates that this is a viable, feasible and sustainable business that will support the Nigerian economy.
Thus far in your tenure, how does this make you feel?
I have been with the project from inception, so this is humbling for me and it is a period for me to reflect and thank my creator for letting me be there at the opportune time; to be part of this great team to deliver this project.
What is your take on the half-year result that was recently released?
The half-year result is a continuation of the good results over the last couple of years. In half year 2021, we had an increase of about 27 to 28 per cent of our profitability income.
Overall, we believe that we will be able to achieve better results before the end of the year. We should be able to average about 30 per cent profitability over 2021.
Has your projection taken into account the current global and local economic headwinds?
We factored some of these issues in moderating our target, because last year we did 43 per cent over the 2020 financial year. We moderated our expectations because of the headwind and we believe we will make 30 per cent minimum by the end of the year.