Telecommunication Companies operating in sub-Saharan Africa could easily help to introduce banking services to the unbanked population through their collaboration with financial institutions, Albert Essien, Group Chief Executive Officer (CEO) of Ecobank Transnational Incorporated (ETI) has stated.
The experienced banker, who made the observation at the 14th MTN Business World Breakfast Meeting at the weekend in Accra, was the main resource person during the event held under the theme: ?Banking in Africa: Lessons from a top banker.?
?If you look at mobile telephony in Africa, it?s well over 60 percent and growing, if you look at banking penetration, it is about 20 percent especially in middle Africa. If we work with the disrupters (telcos), they could bring into the banking sector another 20 percent perhaps in the next three years.?
Mr Essien noted that ?mobile telephony has redefined financial services because almost everybody holds a mobile phone and for some it is more than two.
The Group CEO also stressed the need for consolidation of banks in Ghana to promote big ticket transactions.
?I think the smaller ones still have a chance of survival. Some believe they can play the niche. I don?t believe in niche banking. I believe banking has everything to do with scale. I go for consolidation,? he said.
Explaining further, he said ?when you consolidate and become big, you can stand the shocks that come with the industry, and you can also be able to offer more to your clientele.
?Small time locals should look for alliances. They should look for partnerships, if they do not want to actually merge. But I think ultimately, it will be good for the industry if they merge.
The country currently has a huge infrastructural gap because banks have small balance sheets and cannot participate in huge infrastructural projects.
?If you go to South Africa you always see development ? property, infrastructure over there. It?s being powered by the banks there.The banks have scale,? he emphasized.
BY Samuel Boadi