Mozambique is one of the fastest growing economies in Africa, helped in part by a burgeoning tourism sector, but mainly by the discovery of vast fields of natural gas off the country’s coast. A slew of clever reforms passed by the government with the aim of supporting the development of the financial sector are likely to boost consumer confidence, and international interest.
In this optimistic environment, BCI Bank has been flourishing as one of the foremost financial institutions in the country. One of the bank’s specific aims is to explore some of the more remote regions of the country that have little or no access to formal banking, and by doing so, helping to develop these regions and finance businesses there.
Paulo Sousa became CEO of BCI in 2013, and has been busy ensuring the bank’s recent successes grow into long-term development. He tells World Finance what have been some of the key challenges for BCI in Mozambique’s nascent banking industry, and how he has handled these difficulties as CEO.
The latest BCI figures reveal growth of 20 percent in 2013. What stands behind such significant growth?
Our final data for the whole year indicates that 2013 was a landmark year for us. The bank enjoyed a path of growth and also managed to consolidate the process of this growth. In addition, the base of our customers increase by 38 percent and so did the geographical dispersion of the commercial network. In terms of internal processes and of its strategic positioning, the bank has developed a series of initiatives that will enable it to solidify its structures in the near future and make BCI not only a bank with strong growth, but also a solid bank. Last year did not disappoint, but 2014 will also be a significant year of growth in which we will be committed to the continuous expansion of our commercial network throughout the country, especially in many of the districts where there is no banking service coverage.
38%
Growth in BCI customer base 2013
BCI announced that it plans to invest in the oil and gas sector in 2014. What form will this investment take?
Using our expertise in the area of investment banking and the expertise that our bank shareholders have in this field, we are going to set up a specific desk dedicated exclusively to the energy sector. It will be highly focused on supporting the entire development process of the oil and gas sector in Mozambique, which is likely to undergo exponential growth in the coming years. We are getting ready to become an important force in this field too.
With the discovery of oil and natural gas is there the possibility that other sectors, such as agriculture and tourism, will suffer?
We don’t see that risk. Because the size of the Mozambican population and the country’s potential in terms of agriculture and tourism are decisive in themselves and for these sectors to be of adequate size. Both sectors should develop to be aggregators and to create jobs. Natural resources will always be highly distinctive, niche sectors, with very specific activities, and a high level of know-how, but they will never be sectors that cover all of the population. Therefore, we will continue in our belief that traditional sectors – in which there is still much to do in terms of development, investment and introducing technology – can be more profitable and more capable of creating wealth for the people.
Bringing banking services to rural areas is essential for the growth. What has BCI done to ensure this is implemented successfully?
More than 25 percent of BCI branches are located in rural or peri-urban areas and this number will grow significantly this year. This is a sign of what has been our contribution to the process of bringing banking services to all of Mozambique. The last branch that opened in 2013 was in Mueda, where we were able to truly experience the impact of a new branch in a district where there were no previous traditional banking services. The impact this has had in the population’s day-to-day life has been immeasurable. But agriculture or tourism are proximity sectors where the existence of a bank could greatly stimulate the development of each activity. We are setting up specialised desks and specific lines of credit that respond to the real needs of these types of business, which will always be key sectors for us; they allow a clear distribution of local wealth and the creation of jobs. They are local activities, which help structure the country.
The dearth of financial institutions lending to Mozambican companies is a key issue.Why is there such a shortage of lenders?
We have to recognise the development stage of the country. As Mozambique is an emerging economy, access to credit is a commodity that at times has been considered scarce. But I think that it is part of this vision that we all have of this moment we are going through in a country that is growing rapidly, where there is a constant flow of investment and this creates greater pressure on bank lending. Even so, in many cases conditions are yet to be met for companies to have access to bank loans, because they are not duly structured and organised. I think that time and the development process will help allow some of these problems to be solved. However, I also wish to mention that BCI has been particularly focused on extending its lending base, whether to individuals or to companies, and also on launching some specific ranges in this area.
What investment plans does the bank’s strategy feature?
Above all else, we have a strong short-term growth plan, which is focused on boosting the expansion of the traditional bank branch network. This will allow us to open about 18 new branches this year. We will also continue to invest in the growth of our human resources. The bank has developed a strong growth strategy in the areas of investment banking, corporate finance, and capital markets, which are areas of specific know-how and which we are very focused on maximising at this stage of growth in the country. I would say therefore that we will grow in depth by expanding the organisational structure, but we are also keen to foster growth in an intrinsic manner by developing new areas of expertise that already exist within the organisation.
If growth remains robust, what role could Mozambique play in Africa and the world?
Mozambique now holds a prominent place on the world map as a developing country enjoying rapid growth. We can now compete with international benchmark in what are the best practices in the world in terms of economic growth; but it is a country that still has great room for development, so there are many opportunities. In terms of the African continent, Mozambique has the chance to become a trendsetter due to its potential for development and growth. But above all else Mozambique can set a benchmark in other fields: in the areas of good governance, of economic and social development, and of distribution of wealth. It also has potential in terms of natural resources and is making a name for it around the globe. The country’s potential is huge. The coming decades will be crucial for Mozambique being able to indeed reassert itself as an important figure in terms of the African continent, but above all as an important figure on a world level.
However, for robust and sustainable development to occur there are a series of factors that depend on the country and there are a series of factors that are external. Countries today, in the way they are interrelated on a world scale, cannot determine by themselves what the premises of their growth process will be. What happens in the world will determine what happens in the country.
My thoughts as to what Mozambique can do relate to governance arrangements, investing in key sectors of the economy, in economic and social development, in education, and in health. In practice, to enable the whole population to have access to the benefits of this new economic cycle and for this to be an inclusive process, which relies on all Mozambicans, because this will surely be the way of bringing success and consolidation to the entire growth process.
