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The foremost bank supporting SMEs

Interview - August 1, 2017

In this interview with The Worldfolio, Abiola Bawuah, Managing Director and CEO of UBA Bank Ghana, discusses the prominent role the bank has played in supporting SMEs and how it has been at the forefront in implementing digital services in Ghana’s banking industry.


Like the rest of the world, Africa remains uncertain of what is to happen after major geopolitical shifts, such as Trump´s election in the US or Brexit win in the UK. Investors are turning their eyes to other regions and Africa is becoming a very important part of their investment portfolio. How do you think Africa can take advantage of this global landscape and gain investor confidence?

I think what any investor would want to look for is some kind of stability, either politically or socially. If Africa is to take advantage of whatever shift is going on in the world, the first thing we must do is to make sure that our environment is very stable. Politically we need to make sure that we have the democracy working. That, I think, is the first thing that anybody will want to look at.

The second thing to look at is our currency. One of the major concerns for most investors is the volatility of our currencies, as they fluctuate a lot. People want some level of predictability, they want to be able to predict into the future. So if any investor is going to come, they want to be able to do a lot of forecasting, they want to be able to predict the outcomes of their investment. So my encouragement to African leaders would be how do we get our currencies stable.

We also need to look at the micro side of our system. How do we also make sure that our inflation is kept under locks. It should be low so to reduce the pressure on labour. If you look at African countries, a lot of them have their inflation around 15-20%, some as much as 40%. Every year, therefore, labour is going to come up and demand for more from the investor. And the investor, if he is not able to meet that, will end up leaving the country. So we also have to keep the micro economics very, very stable.

Another factor to look at is also capacity building. A lot of training will have to be done, because most investors do complain about the low productivity of labour across Africa. That is something we also need to look at.

Finally, African governments will have to find a way of making business easy to do in Africa. If you want to acquire land today to put up a factory, if you want to acquire a license today it should be easy, which is something investors complain about. I can’t fathom why we can’t do that. I don’t know what it is because I’m not in government, but I think if somebody wants to come and register a company, it should be easy for me to go to a one-stop shop. So a lot of the various arms of governments will need to be synchronized into one. The Bank of Ghana, the Minister of Finance, the Minister of Trade, the Minister of Foreign Affairs, all these people have something to do with or can influence the flow of foreign investors. They will need to sit together and match the various requirements so that it should be easy for somebody sitting in the UK and say, “hey, where do I take my investment?, I want to go to Africa. Where is there stability? Ghana. Which sector do I invest? Finance. Which bank do I want to partner with? UBA. Okay, let me go online” and it should be done. There are too many roadblocks in the way of investors. So I think that if we are sincere about creating the channel or creating the inflow for investors, it’s not about traveling abroad, it should be about facilitation, capacity building and stability.


2017 marks a new journey for Ghana under a new administration that has pledged to put Ghana back on the right track. How would you assess the economic performance of Ghana and what is your outlook for 2017?

I think it’s very positive and we can all testify to that. The government is committed, one way or the other, to arresting inflation. So inflation has dropped significantly this year, 2017. The exchange rate is also stable now. It’s not too much on the decrease but at least they’ve arrested the way it was galloping before. The government has also reduced in-borrowing significantly, so now banks and financial institutions are targeting the private sector, unlike before where we all dump our money on government. Because in every economy, government supposedly is the safest institution to lend to. So any time government comes up to often to the market to borrow, what they do is to push out the private sector. Now the government has reduced in-borrowing, so there is more money for private sector. All that leads to the private sector growth, which is the right direction.

There has also been during these first months of government a lot of interaction, seminars, and engagement with the private sector. So currently the stakeholders in the economy, a lot of people are up-to-date with government plans moving forward, unlike in the past where we didn’t have information. I can tell you what will happen in the next three months, I can tell you what the government is about to do. So they are pushing out a lot of the relevant information, so people are up-to-date. So it makes forecasting easier.

So in terms of country risk, it’s also fairly stable. If you also talk politically, I think across board they’ve also been managing their position very well. So we don’t see too much of what we call ‘witch hunting’. And so there is some level of political stability. So I think that they’ve done well so far, it’s all very good.


There are currently 35 fully licensed and operational commercial banks in Ghana that are serving just over seven million people. The BoG is considering raising the minimum capital requirements for banks. In your opinion, is the market in need of consolidation?

If I look historically, If I look at the country where my principals are from, one might be tempted to say, maybe the economy is small, why don’t you guys get together. But one thing that I think both, those who support and those who don’t support, agree on is that currently our capacity as individual banks is small.

Whether the more than 35 licensed banks should be allowed to play, I am not Bank of Ghana, I can’t judge that, but I think that we need to increase our capacity. If you ask me, do I support the increase in minimum capital requirements? Yes, so I can get my capacity increase. For example, if my capital base is small, what I can do with a single customer is limited, but if I get my principal to increase it to what the Bank of Ghana has requested us to do, then when a bigger deal comes, I can consummate that.

Now, most of the big deals go out, but they shouldn’t; we should be able to consummate them here. So I am supportive of this initiative, and I think that we shouldn’t just look at things in isolation, we should look at it in terms of making us bigger, serve our customers better.

In order to get to the level of the top banks in the world we need to invest heavily in areas like digitalization. How do we get to that level if we can’t invest into that? The only way we can invest so much into all the modern innovations is by increasing our capacity. And the world is moving towards that direction.


Despite the challenges faced by the Ghanaian economy in recent years, UBA bank in 2016 showed a remarkable 134% growth in profit before tax. What have been the key elements behind this outstanding performance?

Customer service. We have trained and encourage our people to provide the best customer experience. Secondly was the support from our principal, being part of UBA group. And the third thing we did was training to increase our workers capacity.


Ghana is still very dependent in various commodities like cocoa and gold. However the world commodity crisis is making governments look into diversifying their economies into other sectors. How is UBA bank supporting Ghana’s further diversification and industrialization efforts?

If you look at our portfolio, you see that it covers a wide spectrum of activities. Since 2001, governments have been targeting the private sector as the engine of growth. When we talk about the private sector in this part of the world, we’re talking about SMEs. UBA is the foremost bank supporting SMEs, and is the only bank in Ghana that gives money to SMEs without collateral, just based on my understanding of your day-to-day business. I want to know your turnover, I want to know how you make your  money, I want to know how you keep your money against my facility for you. So we decided that we would focus on the private sector, especially those who are into turnovers on daily basis.

We’ve also supported the energy. We are the bank with the highest lending to the energy sector in Ghana. We’ve also supported government. Our economy is agri-based, and most of them are not what we call commercial farmers, they’re usually peasant farmers. So they won’t have the capacity to produce and send it to the market. If the road is not well constructed from the market to the producers, what happens is that the produce arrives rotten. So we looked at it and we said let’s support government in terms of road, because at the end of day that product needs to get to the buyer. Without the buyer you have no business, that’s why there are so many grants and so little development. So, in 2016, UBA Ghana invested 1.2 billion cedis, which is 315 million dollars into road infrastructure in Ghana. So In terms of contribution to the Ghanaian economy, UBA played it´s part.


How is your bank evolving in the digital era to increase your customer reach and promote financial inclusion?

If you look at the Bank of Ghana, they will tell you that as much as 60-70% of the Ghanaian population are bankable but they are not in the banking system. That may be down to historically how people perceive banks. But banking is changing. Banking is moving away from brick-and-mortar to bringing the service to the clients doorstep, tailoring the product to how they want it. Banking has gotten to a level where even though I’m giving you the same product, the product will be tailor made for each individual customer. So we have seen that, and we see that we play very big in digital banking.

Most of the digital banking services Ghana has today were introduced by UBA. If you talk about prepaid cards, today you can put your money in your card, travel without it connected to your account, we were the first introduce it. Today, the government of Ghana is on my platform, they can view all their accounts irrespective of any bank whether local or international. They can view their balance, they can move funds. Today if government wants to move funds from A to B, they don’t need to come to the bank, I have given them a platform. So if they want to move money from UBA to Ecobank, they go on the platform and they move their money to any bank. So that is how we have digitised it.

Today you want to view your balance in Citibank, yes, we can make it available to you. So that is how we have gone ahead. We have a very comprehensive unit, very well trained, we put a lot of resources just looking at how every day we can improve on our service to you. So that is one thing that we have done.

If you look at supporting government to bringing those bankable guys, what we have done is to team up with the telecoms. The telecoms are not problems, the telecoms are issues. Why are they issues, because they are venturing into my market. But I think the first and most important thing to do is to embrace them, let’s work together. So that’s what I’ve done, I’ve gone into collaboration with them. So today every month I have no less than 50,000 Ghanaians enrolling on mobile money through my effort. So we’ve gone into the hinterlands to try and get them to enroll, at least now somebody can put their money on.

We were the first bank to say you can open an account cash-less. So I want to open an account but I don’t have the initial deposit, UBA was the first to bring that. So that brought a lot of people to the banking world, because now the security man can open an account, the watchmaker, the drivers can open accounts. So if you go on the street today and you speak to most of those people, the blue-collar jobs, you will see that a lot of them are part of the banking system


UBA Bank has also set an example in terms of CSR with a foundation that works in areas such as health, education and other special projects. Why is it so important in UBA Bank’s corporate culture to give back to the community? Can you share some of your CSR initiatives?

Our CSR is not just for camera; it’s a heartfelt sincerity to want to reach out, and give back to our society. It’s something that is ingrained in the forefathers of the bank. I’m not going to do CSR because when I do it there will be a lot of cameras, in fact there is a lot we do without camera. And our CSR is not just UBA Foundation. As UBA Bank we do a lot. We want to see it increase, we want to see the growth, we want to give people opportunity.

So today, apart from what UBA Foundation is doing, we’ve also seen that a lot of kids do not speak good English, we’ve seen that people are poor, people want to be further educated but they can’t. So the bank has also come up with what we call a national essay competition. So all over the country people are lining up to write essays. We go as far as to bring in examiners from Western African Council. We put them up in hotels, put the student there, write the essay, and mark it at the international level. And the first person goes for a scholarship visit. The others are given computers, they are given some level of grant to go to school. So it’s not just about books and cameras, no, in this bank each branch takes a community that they want to enhance, a community that they want to impact positively.

As an MD, I go to orphaned children’s homes. I take a little, I buy nappies, food, and the basic things they need.

It’s good to give to the community and it’s good to want to have a positive impact. We are very committed. As a company, our shareholder, our executive chairman for the group, has committed $100 million to develop entrepreneurs in Africa for the next ten years. 1,000 entrepreneurs per years receive $10,000, irrespective of where you’re coming from. It doesn’t have anything to do with whether UBA is there or not. So all over Ghana, Nigeria, everybody there are applying. Today we have over 2,000 entrepreneurs. This year we’re going to have 3,000 entrepreneurs.


What are the opportunities you see for UK investors in Ghana and to what extent can UBA Bank act as a partner of choice?

What I think is of utmost interest to investors in UBA is our corporate governance. We have corporate governance, we believe in doing the best, we believe in doing what regulators want. An investment in UBA is very, very safe. If you bank with us, we do not believe in breaching any policy, so I would advise anybody who wants to come to Africa that the doorway to Africa is the United Bank of Africa.

We are also in 19 countries across Africa. We can give you a product that can manage your investment or your company irrespective of any jurisdiction that we are in. For example, I can start to put my hub in Ghana, but I’m also in Togo, I’m also Benin, I’m also in Côte d’Ivoire, and I can give you a product, I can give you a facility that will manage all these three even though you’re seated here.

And I know if an investor is going to come from UK, the investor is not going to look at just one country in Africa, they will be thinking about moving to the various parts of Africa, and that is why I think UBA is the best company to partner with any company coming from UK or from Europe, because we have what it takes.

We are not just in Africa, we are the only sub-Saharan African bank that is registered in the UK. We are also in New York. This tells you that we are very law abiding, we don’t take unnecessary risks. If you look at our financials you see safety first. So that is our foundation.


You recently stated “the higher you climb up the ladder, the fewer women you see” How do you assess the role of women in a country like Ghana?

It’s true that the higher you climb, the fewer the women. But I’m not sure I believe that it is the men who are preventing us from getting there; I don’t belong that school of thought. I think that women should put their priorities right. We need to show focus, we need to show commitment, we need to think of equality rather than equity.

Whenever I have an opportunity to talk to women, I say focus on the right thing. You need to dress well, but that’s not what the employer is looking for; the employer wants results. Let’s play equality with our male counterparts. And I think the message is getting out there, today there are quite a number of companies, corporates and institutions, that have females as their CEO. We are getting more women also in ministries.