FINANCE FOR ALL WHAT’S NEXT & HOW TO GET THERE

1. FINANCE FOR ALLWHAT’S NEXT & HOW TO GET THERE PRESENTATION BY MR. ALBERT ESSIEN REGIONAL DIRECTOR FOR WAMZ, EAST & SOUTHERN AFRICA ECOBANK TRANSNATIONAL INCORPORATED

2. CURRENT STRUCTURE The African banking sector has seen some governmental reform however bottlenecks still exist • More focus on government and large corporates • Low banking penetration • Lack of adequate branch infrastructure • Neglect of SME sector • Lack of adaptable products for informal SME sector • Affordability of minimum deposit requirements • High cost of finance

3. CURRENT STRUCTURE • Low level of competition • Cash orientation of markets • Remoteness of communities • Ineffective or absence of national individual identification systems • Lack of verifiable address systems • Lack of depth in financial intermediation • Limited coverage of products

4. HOW ECOBANK HAS ADDRESSED THESE CHALLENGES • EXPANDING OUR REACH TO IMPROVE ACCESS: Two pronged approach – channels and products • Strategic focus on Retail Banking • Aggressive network expansion across the group through brick and mortar, ATMs, Kiosks, Direct Sales Agents strategic alliances • Ecobank currently in 18 countries, with over 300 branches in West and Central Africa • Will be in 25 countries in Middle Africa by 2009 with 1000 branches • Provision of convenient, accessible and reliable banking and banking and financial products and services • Focus on liability generation and transaction banking • STRATEGIC ALLIANCES • Partnership with ACCION on microfinance • Partnership with AMADEUS to use their channels to sell bank’s liability products • Partnership with WESTERN UNION • Other “local” partnerships such as EBG’s alliance with TRANSOL

5. HOW ECOBANK HAS ADDRESSED THESE CHALLENGES • IMPROVING EFFICIENCY TO REDUCE COST • Setting up an efficient and reliable shared technology platform to deliver cost-effective services across the Group • This will be the first of its kind in West Africa • SHIFT FROM GOVT/LARGE CORPORATES TO SME SECTOR • Retail banking desks in all affiliates to cater to the needs of SMEs and individuals • Structured product programs for SME sector: distributorship financing, inventory financing, receivables financing, warehouse financing etc • Partnering with relevant agencies to provide training and other support for SMEs • Locally developed debt rating model focusing on limited disclosures common to African SME’s • Working with Moody’s to develop a West Africa specific database to be used to rate local corporates

6. HOW ECOBANK HAS ADDRESSED THESE CHALLENGES • ADAPTABLE PRODUCTS FOR SME/CONSUMER CLIENTS • Introduction of customised Product Programs with local flavour to speed up credit delivery • Group Guarantee schemes – lending to Tomato farmers who guarantee each other • Guarantees from government and other donor agencies in supporting SME credits • Liability products with “affordable” minimum deposit requirements e.g. savings product • Mortgage financing • Lease financing

7. HOW ECOBANK HAS ADDRESSED THESE CHALLENGES • ADAPTABLE PRODUCTS FOR SME/CONSUMER CLIENTS • Non financial based indicators in assessing client risk profile and suitability for credit expansion • Collaboration with “Susu” collectors who have in-depth knowledge local communities and help reduce loan defaults • Electronic products – ATM cards, payroll cards, gift cards, travel cards, credit cards, debit cards, internet banking • Telephone/Mobile phone banking to be rolled out in the near future

8. STEPS TO FURTHER ENHANCE ACCESS: BANKS • Need to tap into the vast potential that exists in large informal sector • This will require - new products - revised documentation requirements - re-look at minimum deposit requirements e.g. Mzansi product in South Africa - new channels e.g corner shops, fuel stations, pharmacies - The “African flavour”: product branding, signage for branches, use of local people, ambience in banking halls, dress code etc • Provision of shared infrastructure in rural areas to be spearheaded by banking sector as part of corporate social responsibility • The Challenge is to “THINK GLOBAL BUT ACT LOCAL” • How do we build African banking institutions that meet world class standards and portray our “African-ness”? • How do we “formalise the informal”?

9. STEPS TO FURTHER ENHANCE ACCESS: GOVERNMENTS • Implementation of National ID system • Transformation of Land tenure system • Improving ICT • Provision of legislative, administrative and funding support to network of community based banks to provide points for delivery of banking services to rural communities • Improve investment climate to encourage more banks – will ginger competition • Use of tax incentives to redirect lending to targeted areas and also to encourage project financing

10. STEPS TO FURTHER ENHANCE ACCESS: DEVELOPMENT PARTNERS • Need to forge partnerships with banking sector • Investment in infrastructure development – telecommunications • Provision of medium to long term financing for on-lending • Technical expertise to bridge skills gap in banking industry

11. CONCLUDING THOUGHTS “Every morning a gazelle wakes up, it knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up, it knows it must outrun the slowest gazelle or it will starve to death. It does not matter whether you are a lion or gazelle, when the sun comes up, you better start running”.

12. THANK YOU