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…..banking at your doorstepIntegrated

Microfinance Bank

Microfinance Banking

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…..banking at your doorstepIntegrated

Microfinance Bank

A presentation

by

Segun AdajuDeputy Managing Director/COO

Integrated Microfinance Bank Limited

at

NECA’s Network of Entrepreneurial Women (NNEW)General Meeting

Lagos Sheraton Hotel and Towers, IkejaFebruary 28, 2007

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Preamble

Growth Vs Development

Posers…

Total theft and wastages in Nigeria since independence is about $400 billion

- World Bank/EFCC Statistics

Posers…

Current foreign reserves is in excess of $40 billion

- CBN Statistics

Posers…

Nigeria is 13th largest oil producer in the world with 32 billion barrels of oil reserve, enough for 37 years

- CBN Statistics

Yet…

Over 75% of Nigerians live below 1$ (N140) per day!

- World Bank Statistics

Still Yet…

Year Estimated Total Poverty Population in

Population (m) Incidence (%) Poverty (m)

1980 65 28.1 17.7

1985 75 46.3 34.7

1992 91.5 42.7 39.2

1996 102.3 65.6 67.1

2001 125 70 87.5

2003 132 70 92.4

2006 140 75 105.0

Posers…

Why the WIDE disparity between figures and reality?

Posers…

The difference between growth and development

Posers…

…and sustainable Human Development

The ONLY Promising Solution…

MICROFINANCE BANKING

What is Microfinance?

Microfinance is about providing financial services to the poor, unbanked and

entrepreneurs who are traditionally not served by the conventional financial

institutions

What is Microfinance?

• Micro savings

• Micro loans

• Micro insurance

• Payment transfer

• Capacity building

What is Microfinance?

• What is a “Micro loan”?

– Amount – smaller in amount than typical business loan– Tenor – shorter and depends on client’s cash flow pattern– Repayment schedule – frequent, sometimes daily, weekly or bi-

weekly payments.– Security – character and business cash flow. Sometimes

backed by guarantees.– Interest rates – higher for micro loans or forced savings are

required.– Training – participation of prospective borrower sometimes a

prerequisite to receiving credit

Microfinance – Indonesia Example

• Bank Rakyat Indonesia (BRI) – one of the world’s leading micro finance institutions (MFIs)

• Has 4,049 BRI Unit desas (village banks) with 96% profitable

• Has staff strength of over 20,000

• As at Sept 2004, BRI had 87% of its loan portfolio in micro loan

• More emphasis on savings with deposit/loan ratio of 225%

• BRI is the largest bank in Indonesia and the most profitable and efficient

• Made a PBT of N30b and had a deposit base of N400b in YR 2005.

• IPO was successfully oversubscribed 15 times in 2003

Bangladesh - The Grameen Bank

• Idea born in 1976 by Prof. Yunus when he loaned $27 from his pocket to 42 stool-makers, women

• Bank was established in 1983 in Bangladesh

• Today, it has 1,800 branches and works in 42,127 villages, with a loan portfolio of $4b to 2.6m borrowers

• 95% of its 2.6m customers are women!

• Has granted a total of 6.6m microloans.

• As of 2006, Grameen Bank had achieved a 98.84% repayment rate

• Has made profit every year since inception, except 1983, 1991 and 1992.

Bangladesh - The Grameen Bank

• Started business in 1983. 1991 and 1992 were years of massive rehabilitation for members of the bank after the devastating cyclone of April 1991

• Has a staff strength of over 12,000

• Has authorised capital of $11m and s/holders’ funds of $142m

• Has diversified into Telecomm with Grameen telephones

• More than 250 institutions in over 100 countries operate the Grameen methodology of micro-credit programs

• Founder and Grameen Bank won the Nobel Peace Prize for Year 2006.

The Facts

Nigeria is 13th largest oil producer in the world with 32 billion barrels of oil reserve, enough for 37 years

The second largest economy in Africa with annual GDP of $71b

One in every five African is a Nigerian! Yet…

Over 75% of the population live on less than $1 per day (World Bank Statistics)

Over 65% of the people are excluded from financial services

Bank outlet/client ratio in rural areas of 1: 57,000

Only one million of about 60 million clients access formal micro finance services (less than 2%)

Micro credit as a proportion of GDP is 0.2%, whereas the informal sector accounts for over 70% of GDP

The Facts

Micro credit as a proportion of total credit is 0.9%, whereas total credit of N2.4 trillion as at December 2006 was given to ONLY 36,000 borrowers!

The microfinance market in Nigeria is the largest in Africa and third largest, untapped market in the world

According to CBN, 84% of money in circulation (currently estimated at N630b as at December 2006) is outside the formal banking system.

The market is estimated at $40b (N6 trillion) with a potential client base of 60 million customers.

The total assets of all universal banks in Nigeria as at December 2006 was is N6.6 trillion

The formal banking system in Nigeria caters for about 20% of the population, mostly in urban areas

Integrated Micro Finance Bank Ltd

Our Profile

Our Vision

To be the leading micro finance institution in Africa.

Our Mission

We are committed to create a leading micro finance bank in Nigeria that would facilitate financial empowerment to the

poor and unbanked, deliver superior values to stakeholders through a highly motivated workforce and efficient technology while remaining socially responsible

Our Payoff

…banking at your doorstep.

Integrated Micro Finance Bank Ltd

Promoters: S.A & S.A Integrated Services Ltd

Board of Directors:

Dr. Mrs. Doyinsola Abiola - ChairmanSimon Akinteye - MD/CEOSegun Adaju - DMD/COODr. Jerry Ariomovuohoma, M, IoDBabalola OwoeyeDemilade Adepoju

Technical partners - ECIAfrica, S.A.- World Bank/MSME Project

Integrated Micro Finance Bank Ltd

Management Team:

Simon Akinteye BSC, ACA, MBA - MD/CEO

Segun Adaju BSC, MBA - DMD/COO

Lawrence Ojebode HND, ACA - GH, Operations

Coleman Oshadami BSC, ACA - GH, Retail

Adewale Oyebamiji MBA, ACA, ACTI - GH, FINCON/Strategy

Seyi Olojede HND, ACA - Head, Internal Control

Chimaobi Agwu BSC, MSC, MBA - Head, Risk Mgt

Titilayo Osinubi LLB, BL - Head, Legal Services/HR

Tunde Thomas BSC,MBA - Head, Enterprise Banking

Jennifer Egbujie BSC, MSC - Head Quality & Comm.

Dr. Bimbola Ogunniyi MBDS, MBA - Head, Treasury

Our Products

1. Micro credit• Working capital loans• Micro leasing• Consumer Finance

2. Micro savings• Modified Daily Contributions• IMFB beneficiary account• ROSCA account etc

3. Micro insurance4. Payment transfers5. Capacity building

• school everywhere, ‘I dey learn’

Our Record

Total number of accounts opened - 33,426Total borrowers - 1,908Total deposits - N453m ($3.57m)Total balance sheet size - N648m ($5.1m)Total loans disbursed - N362m ($2.85m)Outstanding as at February 22 - N273m ($2.15m)Repayment rate - 98.5%Authorised Share Capital - N500m ($3.94m)Paid-up Share Capital - N215m ($1.7m)Staff strength - 501Field Offices - 30IT Capacity - 4m clientsProjected Grant (World Bank) - $2mProjected Paid-up Capital-Sept 2007 - N1.0b ($8m)

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Thank you for your attention.

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Questions and comments

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Integrated Microfinance Bank Ltd

64, Adeniyi Jones Avenue

Ikeja, Lagos

Tel: 2716530-9

Email: [email protected]

Website: www.imfb-bank.com