NPF Microfinance Bank will transform into a depository bank by 2024 – MD

In this interview, Managing Director of NPF Microfinance Bank Plc, Mr. Akinwunmi Lawal spoke about the bank’s plans to transform into a full-fledged depository bank by 2024 and the recent expansion into parts of the North . Except:

HHow do you rate the judgment that NPF is essentially a police bank?

NPF Microfinance Bank Plc, as its name suggests, is a public listed company and its shares are open to the public and not only to Nigerian police officers and men. It is a comprehensive business venture that aims to offer unique financial services to the Nigerian public.

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Our branch opening is not limited to a police environment; we’re in marketplaces, we’re on Facebook and Instagram, we’ve expanded our reach on social media platforms to let people know.

More importantly, our account opening model is also very suitable via our USSD. We are open to the general public as well as to our main constituency which we also jealously protect, the police institution. It is therefore open to masses.

We have seen the emergence of fully online banks which are strong competitors for you, how do you assess the market?

Thanks to IT and fintech, there are strong competitors for banks and financial inclusion has been enhanced and improved, a number of people now have financial literacy and can open accounts.

When it comes to improving facilities, I think we have to be extremely careful not to create a situation where we’ve allowed some people to get to a point where they can’t meet their obligations.

Some people simply borrow for consumption; you have to have an expectation and a means where you would be willing to invest that money in production capacity.

How to repay needs to be a factor that every institution needs to build into a strong credit reporting system to ensure that if we have that internal facility that we give to customers, they should have that ability to pay.

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

There’s no two ways about it. Today it is IT and FinTech that can boost your business and you need to increase the number of them; when you increase 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 are actually increasing day by day and a number of people have adopted the various platforms – USSD platform, mobile application platform to open accounts – then in lead creative activities.

Banking is about service, so to the extent that you can deliver this service effectively and efficiently, it is certain that revenues will trickle down and cover your costs effectively and a reasonable margin for your stakeholders.

How would you describe your public offering at the start of the year aimed at raising funds on the stock market to meet recapitalization needs?

We concluded this way in February and it was a success. It was actually 105% oversubscribed. For the oversubscription, the money was returned to those we were unable to allocate due to the oversubscription. The money was returned to subscribers. We have adopted this on our books: we have been able to increase our capital from 5.8 billion naira to approximately 10.8 billion naira.

We were able to raise up to 5 billion naira from the capitalization; it was actually a success in every way and we are sufficiently capitalized.

For a national MfB, the level of capitalization is 5 billion naira but we are above 10 billion naira, or about 10.8 billion naira. We are overcapitalized for the subsector that we have been.

We have a dream that in the next three years – by 2024. We want to turn it into a depository bank (DMB). This is part of the growth mission to raise a capitalization of 25 billion naira for a DMB. We recapitalized to achieve three major goals: to improve our information technology; increase our branch network and increase our working capital.

Despite the insecurity in some northern regions, the bank has recently expanded by opening branches in such regions…?

The bank, in its quest to serve the public, has opened branches in many states with approximately 32 branches and still plans to open more. The recent branch was opened in Borno State where the Governor was so excited and encouraged people to go out and patronize NPF Microfinance Bank Plc.

Banking services would give people a sense of belonging and I think a lot is being done to ensure that peace returns to all these regions. Anyway, they are Nigerians, they are human beings and they also need financial services.

To encourage people to come and serve, the state governor made a declaration of 100 million naira; 50 million naira to be deposited in the bank, 30 million naira to be loaned to families of deceased police officers; 25 million naira as a scholarship or award to children of deceased officers.

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

For any institution worth its salt, it will want to know its value and perception. And then professionally, for stakeholders in general, to understand the position of the bank in the eyes of the public.

So when you rate A- what we had from Augusto, Triple B+ from GCR and those are investment grade and for a microfinance bank to achieve that level, it shows that MfB is strong, well run and has the ability to meet its obligations at any time.

Invariably, this means that after subjecting us to these ratings, investors around the world will trust and believe that this is an institution they can trust their money to and fall asleep to.

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