Supporting African creditors to excel beyond banking


Small and medium-sized enterprises (SMEs) form the backbone of many economies around the world, particularly Africa. Representing one-fifth of global banking revenues, SMEs generate around $850 billion of annual revenue for banks, a pool expected to grow by approximately seven percent annually over the next seven years, according to a McKinsey Report.

As a customer segment, SMEs offer vast potentials. However, the profits of SME-focused financial institutions have traditionally lagged behind those that specialise in other customer segments, often because of highly varied credit quality in the portfolio.

Finding the optimal balance between providing a great customer experience and managing the cost to serve has also proven to be difficult. As a result, many financial institutions have not prioritized SMEs, forsaking the vast potential value and leaving many SMEs feeling that their needs are ignored.

But now, new customer propositions and better service models, enabled by technology, are creating opportunities for much more lucrative returns. Financial technology firms (fintechs) are entering the business. Big technology firms are also coming into the arena with innovative service models that reduce costs and increase revenue.

The fintechs offerings include traditional banking products and many other business services such as invoice management, payroll support, tax preparation and inventory management. Such beyond-banking ecosystem offerings target customers’ fundamental needs in a single, easy-to-use service.

Even better, the fintech and big tech firm answer the primary challenge of SMEs, giving entrepreneurs more time to focus on their core business activities. Meantime, while seeking creative strategies to profitably serve the SME market, a number of African creditors are leveraging SystemSpecs-owned payroll solutions, particularly Remita, as they adopt an ecosystem approach in tapping this vast market.

For instance, Access Bank offers Remita Payroll solutions to serve its SME customers as an integral part of its beyond-banking strategy. Remita Payroll & HR is an innovative online digital solution that empowers SMEs and large organisations to easily process and pay salaries and manage other related human resource needs.

Remita Payroll also gives SMEs effective control of their payroll processing and deductions including all statutory contributions and tax payments, as well as other electronic payments to vendors.

The difficult and unending hours spent by SMEs to process payroll, payments, reporting and reconciliations are addressed by Remita Payroll & HR.

Managing Director of Access Bank, Ghana, Kris Ifeanyi Njoku, corroborated the efficiency of the solution, saying that the bank’s integration with Remita Payroll system have formed part of the bank’s long-term objectives of meeting the needs of the various organisations regarding payroll management.

David Okeme, Divisional Head, Payment Applications and Vertical Markets at SystemSpecs, said, “As technology providers, we are convinced that this partnership provides Access Bank’s customers and non-customers with new and exciting capability and flexibility for the management of payroll processing and payments at such a low cost”.

He maintained that the partnership aligns with SystemSpecs’ vision of becoming an institution of reference, especially in the provision of seamless technology solutions for payroll and payments management across Africa. The bank disburses about N200 million daily to 4,600 customers via its Payday loan and it is eager to double that number to N400 million and 20,000 customers by December 2019.

However, aside Access Bank, there are 16 other top lenders. These are Carbon, Pettycash, Coolbucks, Ibile MFB, Arvo Finance, Credit Wallet, and PettyCash Nigeria.

Others include PayDayhub online Nigeria, Free Cash Solution, CIT MFB, Devonsley Limited, Happy Partners and Bridge Credit.

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