Africa’s Ecobank plans to prioritise expanding the customer base in its existing markets by tapping into Africa’s growing use of mobile phones, rather than pushing into new countries, its chief executive said on Thursday.
The Togo-based pan-African bank operates in 36 African countries, but a slump in commodity prices in recent years and unfavourable currency swings have prompted it to shift its focus to the booming retail market, where latent demand is being unleashed by mobile technology.
For years the lender focused on rapid expansion into new nations across Africa, but has tapered this off to focus on the markets that are most profitable, like Nigeria, Ghana and Kenya.
“Our intention is not just to grow in terms of more countries, our intention is to now utilise what we have, the assets we have on the ground, and be able to connect people,” Ecobank Chief Executive Officer Ade Ayeyemi told Reuters in an interview while on a visit to Senegal’s capital Dakar.
“The best way to get the cost down is to use digital so that we can deliver this to people in their palms, and so they can do transactions without leaving their offices and homes,” he said.
Ecobank announced in March last year that 1.5 million users had signed up to its mobile app, and that it expected its new digital banking platform to boost its customers to 100 million from 13 million by 2020.
The bank suffered a hefty $131 million pre-tax loss in 2016 blamed on a two-year recession in Nigeria, where the bank generates 40 percent of its business.
Ayeyemi suggested low cost mobile services would enable to bank to capture people on lower incomes who are currently outside of the banking sector.
“If we do this, the cost to serve goes down ... and therefore the bank itself is able to be much more profitable,” he said.