| Thu 18 Sep 2008, 12:01 | | BFS - Blue In Partnership With Intercontinental Bank, Officially Opens For |
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BFS
BFS
BFS - Blue In Partnership With Intercontinental Bank, Officially Opens For
Business In Nigeria
BLUE FINANCIAL SERVICES LIMITED
(Registration number 1996/006595/06)
(Incorporated in the Republic of South Africa)
JSE Code: BFS
ISIN: ZAE000083655
("Blue" or "the Company")
Blue, in partnership with Intercontinental Bank, officially opens for business
in Nigeria
Altx listed Blue Financial Services (Blue) officially opened for business in
Nigeria, making it a total of twelve countries in Africa where the JSE-listed
microfinancier has operations.
Blue previously announced its impending presence in the country, when on March
6th, in Lagos, it signed a partnership agreement with Nigeria`s largest bank,
Intercontinental Bank plc (ICB).
A new company, Blue Intercontinental Micro Finance Bank (BIMFB), has since been
formed to market, distribute and sell Blue micro-financing services and products
into Nigeria`s retail market.
Initial distribution will be through the BIMFB flagship branch at its head
office on Lagos mainland and ten BIMFB kiosks set up in selected ICB branches
around Lagos State. Advertising flyers will indicate to potential customers in
which branches these kiosks can be located. The BIMFB venture will enable Blue
to tap into the potential of a largely unbanked market and leverage off the
progressive reforms in the financial services sector.
The strategy of using ICB branches may seem contrary to present banking trends
where the branch is declining in importance as customers are encouraged to use
electronic or telephone banking. Blue`s model is one based on face-to-face
interaction with the customer and is more suited to the products we are
offering. For this reason stand alone BIMFB branches will be utilised in
addition to kiosks in Intercontinental Bank`s branches.
Products include salary advance loans, personal term loans, retail loans, loans
for small business finance and home improvement loans.
Intercontinental Bank will be providing Blue with invaluable local partner
expertise as well as a significant footprint in excess of 300 branches across
all states.
BIMFB will be managed by three directors - South African Jaco Coetzee and
Nigerians Dr. Muftau Raji and Frank Ajilore, and the initial staff complement
of 34 is expected to grow monthly in line with the expansion of operations.
The Nigerian microfinance market is significantly under-served and unbanked,
with limited product offerings. Although there are 24 banks in Nigeria, less
than 10% of their lending is to individuals. The average bank density is one
outlet for 32,700 people in urban areas and one outlet for 57,000 people in
rural areas. The Nigerian banking industry concentrates mainly on deposit taking
and savings accounts and consumers are constrained by requirements to have
existing products with a bank before qualifying for further offerings.
These limitations have led to around 60% of the economically active population
having to be serviced by informal financial sector players such as non-
governmental organizations, micro finance institutions, moneylenders, friends,
relatives and credit unions.
To address these problems, in December 2005, the Central Bank of Nigeria
launched its National Microfinance Policy and Regulatory Framework which aims to
provide a conducive environment for the provision of sustainable financial
services to consumers not adequately served by the existing formal financial
system.
Johannesburg
18 September 2008
Designated Adviser
PSG Capital (Pty) Limited
Additional note
Blue, the AltX listed pan-African financier, is currently one of the "big three"
listed micro-financiers in South Africa. Of the three, Blue is the only micro-
financier with a significant presence outside of South Africa, currently
operating in 11 other countries and planning to open further African
subsidiaries before the end of the year. Blue presently services its clients
through 175 branches manned by more than 2 000 employees.
Blue offers formally employed people in the LSM 2-7 brackets access to credit
solutions such as salary advances, home improvement loans, home loans and
insurance. Blue is registered with the Finance Services Board (FSB) of South
Africa and the central banks in each of its operating countries.
Date: 18/09/2008 12:01:01 Produced by the JSE SENS Department.
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