Mohammed Jubrin, MD/CEO, Suntrust Bank Nigeria Ltd is heading a mortgage institution that transited into a commercial bank in 2016. This is a landmark accomplishment, being the first commercial bank licence the Central Bank of Nigeria has issued since 2001 and coming in a year of Nigeria’s worst economic performance in decades.
Getting out of recession depends on the quantum of new investmentsflowing into the economy. Government’s role in such periods is to spur the private sector to invest by investing heavily on capital projects, which is what it has tried to do through increased capital spending. Government’s capital spending vote approached 30% of aggregate budget for the first time in many years last year. Private sector spending is expected to begin trickling in and Jubrin’s investment in commercial banking is one such positive responses.
His confidence on the Nigerian economy and his stepping out in practical demonstration of that confidence contributes a stimulatory force to the system. Transformation of the banking sub-sector in order to touch the lives of people is his mission in commercial banking. Increasing access to finance is what he is offering as a stimulatory force to economic development.
He has found an opportunity to make a contribution in a country he believes is still heavily under-banked. Current statistics in the banking industry spell for him a great opportunity in the business. Of the 50 millioncustomer accounts in banks, roughly less than 30million of them are verifiedin a country with a population of about 180million with an annual growth rate of about 3%.
Jubrin sees even a greater opportunity in the segment of the public outside banking services – the group of young people thatis virtually excluded. He is therefore out to bring in the financially excluded and feed them with other products in the process. He sees a tremendous opportunity insome locations of the country that lack access to banking services in line with the CBN’s drive for financial inclusion.
Suntrust Bank secured a regional licence for the South-South, South-West and Abuja territories and is in the process of setting up branches in the capital cities of the region this year. Jubrin believes that plunging in at a time when the banking industry is going through big challenges, has its merits. Part of the challenges affecting banks stems from customer dissatisfaction and lack of access to finance to most people, which are indeed his opportunities.
Jubrin’s strategy is offering an alternative route to commercial bank customers by ways of the service distribution channels and type of products being offered. He is building a big technology platform designed to deepen the reach in the retail market. Nigeria’s large number of active telephone lines is where the retail banking market of the future is and that is where Jubrin is headed. He isn’t going to copy brick and mortar banking; he is going to create access to banking services on the mobile phone.
Jubrin is leading the banking industry to a new phase of innovate use of technology to drive financial services at low cost. The prospects for reducing banking transactions to the level of opening an account on a mobile phone and transacting business with it give the new bank an effective market far beyond its geographical definition. The technology driven banking services model of the new bank seems to make a statement that the well known large network approach to commercial banking is fast becoming obsolete.
Lack of access to funds for most people to undertake productive activities is part of the challenges presently facing both banks and the economy. Most young graduates with entrepreneurial ideas and the youth are not productively engaged because they do not have access to finance.
The solution lies in a counter cyclical move that makes it easy for people to have access to finance, which is what Jubrin is promising. Cutting cost to reduce cost also to the largely dissatisfied bank customers is a convincing strategy for an institution that is driving financial inclusion.
Jubrin is responding to his discovery that only a small percentage of the economy is in the banking system and that banks are not financing the small businesses that constitute the engine of economic growth. This has made financial intermediation severely limited in Nigeria, which explains why bank are easily dislocated by withdrawal of public sector funds. The opportunity for millions of Nigerians to be included in the banking system represents a major development with great benefits to the economy.
Building a new bank at a down time in the economy takes courage but demands the ability to see beyond the present. To Jubrin, it isn’t a show of brevity; the main driving force is the opportunity to take Nigerian banking to where the people are going – the electronic platform. He foresees that bank customers of tomorrow wouldn’t be going to banking halls and what he has come to do is to respond to the needs and expectations of bank customers of tomorrow.
Jubrin is recognised as one of the top 10 CEOs of the year, 2016 by Top 10 Magazine for his landmark achievement of breaking the seal on new bank licensing since 2001 and starting up a new commercial banking operation in Nigeria in a year of economic decline.