By ABDUEL ELINAZA, 5th October 2011
STANBIC Bank on Wednesday launched a new scheme that offers small and medium enterprise an opportunity to secure loans with no collaterals or securities.
The product known as SMEs Express Loans (SEL) just requires the applicant to pass a psychometric- a measurement of knowledge test- that determines the success or failure of obtaining the loan and the amount to be borrowed.
Stanbic Tanzania Managing Director, Bashir Awale, said after passing the test, it will only take three business days to get the loan up to 30m/-.
“It is an unsecured loan, which is tailor made for each person’s needs,” Mr Awale said yesterday at soft ceremony when launching the product.
This is the first time this kind of the product to be introduced in the Tanzanian market.
“It is a fastest and hassle free product which will enable many traders to have access to funding to promote their businesses,” he said.
The product has come at a time when accessing loans for SMEs is a headache because most businesses are shunned by financial institutions which demand heavy securities and collaterals.
He said the test is very simple and it has proved to be a good product which has hit the market with a bang.
“Since the product was introduced in the market two weeks ago, our Kariakoo branch served over 150 traders who secured loans totalling 1.5bn/-'', he said.
The same product is operational in Ghana, Kenya and Nigeria. “Our intention is to move our customers forward and grow with them while growing their businesses,” Mr Awale said.
Speaking at the same occasion, Head of SMEs Banking, Mr Adelhem Msiagi said the test uses a special programme that determines the level of loans to each applicant.
He added that the product is expected to be rolled out to the rest of the country beginning next year.
The bank has decided to focus on Kariakoo area with a good number of SMEs. It also serves traders from the neighbourhood countries such as the Democratic Republic of Congo (DRC), Zambia, Zimbabwe and Malawi.
According to the bank, the loan payback period is between three and twelve months, attracting between 2.5 and 4 per cent interest rate.
The rates are much low compared to 5 and 10 per cent charged by most of the micro financing institutions. Tanzania has about 45 banks but has managed to reach slightly above 10 per cent of bankable population, while loans obtaining is not easier for start-up and SMEs ventures. -Source
CEO - Ganjab Investment Holdings.
Ganjab Holdings is a family business with 5 active members that was formed during October 2002 in the lush climate of South Africa. Ganjab Holdings has since been very successful in its combined ventures, ranging from clothing retail & wholesale, real estate & telecommunications.
Musa Ganjab is the CEO of this venture capital driven company & prides himself on being conducting all business with transparency & structured principles. After running numerous successful business ventures, Musa Ganjab has brought his family together through this business venture, with the vision of creating a business model that works financialy as well as ethically.
Ganjab Investment Holdings has combined the efforts of their family members which has given birth to something very special. Like a well oiled machine, every member brings valueble experience & moral judgement.
The combined efforts of these members has resulted in an extreamly high success rate & an organisation that runs on optimum efficiency & effectiveness. We have chosen the South African market as our place of business due to the massive potential growth in every sector. It is a developing nation & is the financial forefront of Africa.
Over the past few years, we have established ourselves as a reputable company in this South African climate. In doing so, we have solid relationships with other business partners in the region that have proved to be indespensible.
The horizon seems bright for this young organization. Prospects in transportation, mining, imports and exports, exchange bureau & tourism are in the pipeline for the coming year. We look forward in extending our already large international community of partnerships in the months to come.
“Ganjab investment holdings is a long-term investor, forging strategic alliances on a partnership basis while continuing to add value where possible. We believe in providing a service of solutions that recognise the importance of discretion and delivering clear investment objectives. Our philosophy is to collabarate with our partners in providing high levels of transparency and information - Source
CEO - Takaful Insurance of Africa.
Kenya’s first Islamic insurance firm looking to overcome challenges.
Kenya’s insurance industry is crowded with more than 40 firms in operation. Ironically, due to negative perceptions, the collapse of several operators and lack of education, only 2.8% of the population is insured. A month ago, Takaful Insurance of Africa (TIA) – the first fully Shariah-compliant insurance company to be registered in Kenya – began operations riding on the fundamentals of integrity, honesty and fairness outlined in the Shariah laws. Around 10% of Kenya’s population of 40 million is Muslim and TIA is hoping to capture a sizeable portion of the market. How we made it in Africa’s Regina Ekiru spoke to TIA chief executive officer Hassan Bashir.
Tell us more about TIA?
TIA was founded in 2008 and formally licensed in January this year. Unlike conventional insurance products, under the Takaful (an Islamic insurance concept) model no interest is charged and losses and surpluses are shared between policy holders and the company. Premiums paid by clients are channeled to a risk fund managed by TIA. These funds will pay for losses suffered by the contributors to the pool. Once the risk fund surpasses a certain threshold amount, the surplus is given back to the members.
TIA will act as an agent in managing the Takaful operations on behalf of the clients, administering the participation process, managing collection of the Takaful contributions and processing the claims according to the contract agreed with the clients. In return, TIA is entitled to a fee which is deducted upfront as a percentage of the contributions paid by the participants.
We will unveil our first branch in Nairobi’s Eastleigh, an estate that has a large Muslim population. We are going to Eastleigh because it is outside the periphery of insurance at the moment. In the pipeline also are two other branches in Mombasa and Nairobi’s central business district. Our ambition is to also register subsidiaries in Tanzania and Uganda in the coming years.
Do you think there is demand for Takaful in the African market?
As an insurance practitioner, I can say there are certain elements of conventional insurance products that one cannot sell to Muslims. TIA is here to fill that gap.
Are your products available to non-Muslims?
We will be opening our doors to all Kenyans. The model is designed to serve people of all faiths and backgrounds, despite the reference to Shariah laws. We are simply providing an ethical product line. Anyone willing to be managed under the fundamentals of fairness, justice and responsibility is welcome. We believe these are the fundamentals that underline all religions.
What challenges do you foresee in the market?
The concept of Islamic finance is new in the country and regulatory measures have not been evened out to fully accommodate the Islamic finance sector. A lot has to be done in terms of regulation, considering that our model is non-interest-based operations that might present difficulties in fund placement. A significant part of insurance profits come from investments not premiums. We will have to find compliant instruments within the regulatory environment that currently exists. This will be a challenge since it automatically reduces the windows of opportunity.
How do you plan to get around these challenges?
We are looking at compliant investments like infrastructure bonds in the future. We are also engaging players in the Islamic banking sector to create investment opportunities that are Shariah complaint.
What is your financial targets for the year?
Our target is to make premium collections of Ksh.1 billion (US$12 million) in the first twelve months of operation.
Where do you want to take TIA?
I would like to spearhead TIA to the league of the top ten best-performing companies in East Africa. It seems like a tall order, but it is not. Our target is to expand the boundaries of the insurance industry and improve the penetration in the country, and this we will achieve. -
Portfolio Manager, Private Equity & Investment Funds Department, International Finance Corporation
Ayaan Adam is currently the Head/Manager in charge of International Finance Corporation's (IFC) Private Equity and Investment Fund Portfolio. She also heads new business opportunities in infrastructure funds, distressed assets, listed funds and other single sector funds. She is responsible for US$2.5 billion portfolio involving 160 different relationships with private equity and venture capital funds invested or investing in Asia, Africa, Europe, Middle East and Latin America.
Prior to this position, Ayaan held a number of leadership positions in IFC's Global Financial Markets Department, including the position of Manager of the Global Transaction Group; and Head of New Business with responsibility for the development and the delivery of the financial sector and private equity programs in two key regions: Sub-Saharan Africa and South Asia. Prior to joining IFC in 1996, Ayaan had six years of experience in the US financial service industry, namely commercial banking, insurance, and management consulting. She holds a Master's of Science in Management from MIT's Sloan School of Management.
International Finance Corporation
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year.
IFC has a portfolio of investments in emerging market investment funds representing a commitment of over $2.5 billion in around 160 funds. While the corporation has been investing in private equity in emerging markets since the 1990s, in 2000 it created a department to specialize in Fund investments and adopted a structured approach to investing in Funds which has produced solid results in terms of both development impact and returns. Investee companies of Funds backed since 2000 have generated job growth substantially higher than the relevant regional averages, creating over 162,000 jobs. 53% of the investee companies were SMEs at the time of investment and 78% of funds are deemed successful in achieving their development goals. Many of the funds of which IFC was an early supporter have developed into major players in their regions, such as CDH China, Baring Vostok, Advent and GP Investimentos. As funds we support become successful enough to easily attract support from commercial investors we say goodbye, and seek emerging managers who need our support. IFC has a good record in selecting first time fund managers. We have been increasing our willingness to work with first time managers and in FY08 74% of the funds we supported were first time funds.