FinanceMaking the news

Unlocking Africa’s Potential: The Bright Future of Mobile Money and Digital Payments

8 Mins read

Unlocking Africa’s Potential: The Bright Future of Mobile Money and Digital Payments

With 35 years of emerging markets banking and payments experience across the globe, ABHINAV NEHRA is also driven by his passion and belief in the potential of Africa, where he once served as Group Director, Retail UBA and Group Director, Retail and Commercial at Ecobank Plc., based in Accra/Lome. He spoke to KEMI AJUMOBI on emerging markets, digitisation, building a virtual Pan African neo banking model amongst others. Excerpts.

MEET ABHINAV NEHRA

Abhinav Nehra is a business leader with more than 35 years of emerging markets banking and payments experience across the globe. Abhinav started his career with Citibank in 1989 where he has held senior leadership roles through his 18 years career and set up CitiFinancial India as a CEO which was the most successful consumer finance franchise for Citigroup. He went on to do the Global Leadership Programme for Citigroup in CitiFinancial HQ in Dallas and successfully set up similar businesses for Citigroup in Indonesia and Australia.

He was the Deputy CEO for Retail & Private Banking for Ahli United Group (BKME) in Kuwait before joining United Bank for Africa (UBA) as Group Director -Retail, and set up UBA RFS (Retail Financial Services). Subsequently, he was appointed Group Director (Retail and Commercial) for Ecobank Plc., based in Accra/Lome. He has led several digitisation initiatives in retail lending, payments and neobanking domains across Africa.
Abhinav is driven by his passion and belief in the potential of the continent and its people having worked in various leadership roles on the continent over the last 17 years. He has travelled the deeper trenches of Africa across 34 geographies and understands the challenges and regulatory landscape like the back of his hand.

In his recent role, he has established presence for Network International first in East Africa and the 18 Francophone countries in the last 30 months.
Abhinav is happily married to Anurita who beside being an insurance professional is celebrated Chef and was part of MasterChef India and daughter Anahita who is a banker in UAE. He is an avid golfer and passionate about travelling, and has travelled to more than 85 countries across various continents.

What are some of the biggest challenges you have faced while operating in diverse emerging markets? How did you overcome them?

Emerging markets across the globe are so diverse that each market has different set of challenges, but that’s what I love about my job. Each of these markets makes you think totally out of the box and makes you find innovate solutions for diverse problems which keeps your brain cells ticking.I was lucky to have my initial grounding under the best brains in Citibank APAC/India where it was ingrained in our DNA to innovate and think out of the box .

As a business leader with extensive expertise in global payments, what are the key factors a company should consider when entering a new business?

Payments is a local business and that’s the key to success in any market. Payments as a business has evolved over the last few decades and it is essential for any payment services provider to understand the local ecosystem, culture, regulatory and currency framework. It is impossible to assume that what works in Kenya would work in Nigeria or Ghana and what works in Cote D’Ivoire will work in Senegal or Mali.

How have you navigated the regulatory landscapes where you have worked in Africa? Can you provide examples of successful strategies you employed?

In Africa, each country regulator thinks differently and regulatory environment in each country is at a different stage of evolution, but it is easy to navigate the landscape as the regulators understand and are open to change. The best way to navigate these landscapes is to present successful and logical examples. I faced many such situation especially while working on setting for UBA retail financial services and convincing the CBN to give us a federal license for MFB as well as an exclusive Islamic banking license.

What strategies have you used to build and maintain successful partnerships with local banks, financial institutions, and governments in various emerging markets?

Collaboration and success transfer is always the key to any successful partnership. Most multinationals in the global financial services space have the best of class technology and successful business models from other emerging markets in LATAM/APAC, but they don’t understand the African landscape, diversity of the continent and the challenges.
I have always tried to bring the two together and best way to fast track this is by importing skill sets which can train local talent which is the long term sustainable solution.

Can you share some instances where you have identified and capitalised on untapped opportunities resulting in significant business growth?

I have quite a few examples after having spent 17 years in the trenches of Africa. One of them being during my stint with my previous employers who was struggling with getting a payments’ scheme on board, we were able to get a pan African MOU signed with one of the payment schemes, who brought skills, technology and knowledge, and the bank pitched in with the local licenses and understanding of the local demographic and regulatory dynamics.

How have you managed to adapt technologies and innovations to meet the unique challenges and needs of businesses?

Technology is always an enabler and tool for any organisation to evolve and keep growing, but innovation must be embed into the DNA of your organisation culture, keeping the customer at the centre of both. Innovation drives success in the long run.

Can you share some of the key reasons behind the need for digitisation initiatives in retail lending, payments, and neobanking specifically in Africa?

Africa always was and will always remain a virtual story, and what I mean by virtual is that a pure brick and mortar branch model will never be profitable on this continent due to challenges regarding infrastructure, networks, security, cost of real estate and skill sets. Building a virtual Pan African neo banking model is the fastest way to financial inclusion on the continent, which still has the lowest penetration globally. Whether it’s on retail lending or payments, telcos are sitting on a gold mine of data but they lack the mindset, expertise, and risk appetite of consumer bankers whereas the old traditional banks don’t have reach and distribution. To fast track this journey, some of the successful global emerging models must be success transferred and blended locally.

What role do you believe mobile banking and digital payments will play in the nearest future beyond what they are doing already? How have you leveraged these technologies in your career?

Mobile money is the future for Africa. As Africa overshot the landline telephony and the mobile phones revolutionised the continent, mobile money and Neo banking is what holds future for Africa. Digital payments rails, including data and reach carry and hold the future for financial inclusion in Africa, as credit bureaus and credit scores in Africa will never be built unlike the west. The future for Africa lies in mobile money and digital payments. Credit cards will never have penetration in Africa like the west due to lack of credit data and challenges in street address and infrastructure.

The banking giants who are the so called traditional financial institutions carry some kind of trust but lack the mindset, the reach and distribution of fintech’s and mobile telcos. The two will have to, at some point, merge and leverage on each other’s strengths to succeed and make a difference on the continent. This is already beginning to happen with likes of Mastercard and Visa buying stakes in the fintech’s arms of telcos.

What specific strategies did you employ to ensure widespread adoption of digital solutions among the unbanked population in Africa?

Digitisation of any kind leads to cost reduction and the result is of benefit t

Africa has massive share of inward remittances which flows into the continent through the diaspora, and the costs are highest globally. Imagine if we can directly let these remittances flow to the wallets or accounts of recipient, the costs will come to 1/5th of the existing costs. Similarly, a neo bank which can service its customers virtually can offer better loan and deposit rates to customers and so on.

As a business leader, how have you prioritised corporate social responsibility and sustainable business practices?

Any successful business, especially financial services, must embed themselves in the communities which we serve. Financial inclusion goals are best achieved if you are visible and serve those communities well. To give you an example, if you are supporting an agriculture community and helping them save and lending to them, you will see your delinquency rates at bare minimum if the community sees you supporting them with schools’ hospitals and so on. In my CitiFinancial India role, we saw this clearly once we were visible in the communities where we had branches, our throughput and delinquency rates in these communities and neighbourhoods were vastly below the averages.

How did you/are you addressing security and fraud concerns related to digitisation in retail lending, payments, and neobanking in Africa?

Today, as the digitisation levels increase, we are automatically getting rid of any security concerns and less cash is being handled. Also, globally, we now have the most advanced fraud tools available to capture fraud. The issue which is key in Africa is to capture data more scientifically and organise that. Once we can do that, fraud can be tackled.

Why the passion for financial inclusion?

Financial inclusion especially at the bottom of the pyramid is the key to the development of any economy. Africa has a massive potential with its reserve of minerals, oil and metals. That is also the only way out of corruption. If we can empower and support the SMEs, women entrepreneurs and those at the bottom of pyramid, we should be able to tackle poverty and corruption and weed it out from the root. I have seen that evolution happening in India and hence we want same for this beautiful continent and its people.

What is Network International about?

For over 25 years, Network International has delivered innovative solutions that drive revenue and profitability for our customers and help businesses and economies prosper by simplifying commerce and payments. We have grown from strength to strength to become the largest acquirer in the UAE and the leading enabler of digital commerce in the Middle East and Africa (MEA) region.

We provide a robust suite of payment products and services that are on the cutting edge of technology development

In 2021, we processed $42+ billion in total processed volumes (TPV) for more than 150k merchants and processed over 979 million issuer transactions on 16+ million cards for over 200 financial institutions.

Our two business segments are the Middle East and Africa. Our largest segment by revenue is the Middle East, which includes the key markets of the United Arab Emirates and Jordan. We have recently entered Saudi Arabia, a market that offers significant opportunities for growth and we provide services in more than 40 countries in Africa, including the major markets of Egypt, Nigeria, and South Africa.

With operation centers in the UAE, Egypt, Jordan, South Africa and Nigeria, and the corporate head office in Dubai, Network is positioned to stay abreast of the fast-evolving payments industry and to continue developing solutions for emerging opportunities.

Why the passion for travelling and how were you able to do more than 85 countries across various continents?

I love traveling because it allows me to immerse myself in different cultures, traditions, and lifestyles. It provides a unique opportunity to learn from and appreciate the diversity of our world, and it has been a fulfilling one for me.

One other thing is that, traveling often takes you out of your comfort zone, exposing you to new challenges and experiences. I am also adventurous, as I seek to explore new landscapes.

Traveling also affords me the opportunity to rest. It is my escape from daily routines, and an opportunity to unwind, and rejuvenate. It provides a break from work or personal responsibilities, enabling me to recharge and de-stress.

On how I managed to travel to more than 85 countries across various continents, for me, it was about planning. It involves researching destinations, preparing itineraries, and making necessary arrangements in advance. I also love to discover places I have never been to before. This fuels my curiosity and I enjoy every bit of it.

Source: Businessday

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