Reaching out: Banks expand their services to win new customers

Since 2009, the number of players in the banking sector has increased from seven to nine. A tenth is soon to be added as the Gabonese postal service rolls out the Poste Bank. In a country of 1.5m people, competition is growing, which in turn is driving innovation in an effort to increase customer retention and win over new commercial and retail clients.

NEW SERVICES: Recent entrants to the market, like Ecobank and United Bank for Africa (UBA), are bringing their extensive experience in other African markets to bear on the Gabonese banking sector. Ecobank, which entered the local market in 2009, is pursuing an aggressive expansion strategy, looking to open additional branches to complement its current three in Libreville and one in Port-Gentil. Meanwhile, Union Gabonaise de Banques (UGB), which was purchased by a Moroccan company, Attijarawafa Bank, in 2009, has plans to set up fix or six additional ATMs by the end of 2012. Ecobank, UGB and UBA also offer payment card services (carrying either the MasterCard or Visa brand for UGB and UGA), which facilitate travel and ease interbank actions.

Other banks are starting to diversify their product lines for their clients. BGFI, for example, offers some insurance products through its banks, such as overdraft insurance and life insurance. For the latter, the bank will provide CFA500,000 (€750) to beneficiaries upon death or disablement. Moreover, to attract more customers, BGFI is transforming its microfinance bank Loxia into a full service bank, which should be operational by 2012. Some lenders are considering a move into the consumer credit market, a segment that was formerly the domain of specialised firms like Finatra and Alios. “Access to credit is a key driver of new clients, especially those at the lower end of the income scale,” Redouane Bennis, the assistant director-general of UGB, told OBG.

Another area with opportunity for development is mobile banking. In March 2012 BGFI launched a joint venture with Bharti Airtel to provide money transfer services throughout the country. Marketed under the name “Airtel Money”, the plan – which does not require a bank account – allows subscribers to send and receive money, deposit and withdraw cash, purchase airtime credit, and pay bills for goods and services (see analysis). BIGIC is not far behind. It has purchased the technology to implement a similar system and is forming partnerships with other mobile operators to provide a competing service.

LA POSTE: No organisation has the opportunity to have a bigger impact on retail side of the market than Poste Bank, the new bank that has been created by the Gabonese postal service, La Poste. Poste Bank aims to capitalise on its retail network of over 70 outlets throughout the country and the savings accounts that it currently manages for its clients. Citibank was hired by La Poste to do a feasibility study, which identified two key markets: small and medium-sized enterprises in the interior of the country without access to banks; and mining and agricultural companies that are located far away from the economic centres of Gabon. La Poste has signed a contract with the Chinese telecommunications firm ZTE to provide closed-circuit satellite communications for remote branches. This also opens up the possibility of La Poste providing internet services from its branches in remote communities. Poste Bank has also signed a partnership agreement with its French equivalent, which will help with management and other operational issues. The new bank will be opening its first branch in the Louis neighbourhood in Libreville sometime in 2012.

Consumers and foreign investors alike look to benefit from increased competition in the financial sector as banks expand into new segments. Individual consumers should see better service and more products, such as mobile banking and payment cards, while commercial clients are likely to benefit from better interest rates and other services as lenders compete for customers and financing opportunities.