Tanzanian Banking Sector: Jubril Adeniji Gives an Overview of Guaranty Trust Bank Tanzania

Interview with Jubril Adeniji, Managing Director of GTBank Tanzania (Guaranty Trust Bank)

What is your scope of business and your competitive advantage? How do you distinguish yourself in the market?

Guaranty Trust Bank Tanzania is a full-fledged subsidiary of Guaranty Trust Holding Company PLC that is listed on the London Stock Exchange and the Nigerian Stock Exchange. We secured an operational license here in Tanzania at the end of 2017 and commenced operations in the first few days of 2018. We have operated for about 4 years in the market. The Tanzanian market is quite competitive. Most banks that operate today have been in the market for a minimum of 15 years. There are some that have been here for close to 30 years, and some in excess of 50 years. Coming into a market with about 40 banks as a new entrant and as an international player, a lot of hurdles had to be crossed to ensure that we would gain acceptance in the market. The first thing we did was to build trust in the market. To do that, we built a state of the art office here which distinguished our banking premises and the ambience of the environment within the market. Guaranty Trust Bank Tanzania’s banking premises has a distinct ambience in the market which no other bank has today. All banks within this market still operate behind a glass shield over the course of engagement with customers. We came into the market and changed that, and we are still the only bank with such a banking operational environment in the market today. We do many other things to ensure that we are different in this market. The Guaranty Trust Bank culture remains a very strong competitive advantage for us. To build this culture, we ensure that we groom Guaranty Trust Bank professional bankers from the very early stages of exiting their degree programs. We did the same here in Tanzania and of the current team in the bank, about 80% are young Tanzanian graduates and people within the market that have been groomed and are running the bank professionally today. At Guaranty Trust Bank, service excellence, customer engagements, and customer experience remain very strong for us. The team has been groomed in alignment with the Group’s standards to ensure that commitments that are made are kept and done professionally. We provide customizable and bespoke products. In a market with 40 banks, we needed to do something different. The only way we have been able to gain some entry into the market today is through our very strong digital platforms where we have given our customers the opportunity to tweak services towards addressing their particular challenges. When we solve the challenges of our customers, that gives us an entry into their business. We are giving every Tanzanian that has given us an opportunity to serve them a very positive experience and that word of mouth has given us entry into the market.

What are some of the practical solutions that you have provided to solve these challenges that your customers are facing?

We have a new platform called the GTSACCOS. We were one of the first banks to integrate fully with the government electronic payment gateway in Tanzania, which is the platform where all government payments are made.

Tanzania is a market where there are a significant number of international and local non-governmental organizations because there are still a lot of health and educational needs in the country that are being addressed through a lot of foreign aid. Prior to us coming into the market, aid would usually be implemented through implementing agencies where the international organizations disbursed funds to smaller entities and tried to ensure that the service got to the final end user. Recently, most international organizations have decided to adopt the transfer of aid funds directly to the end user and not go through a middle implementing partner anymore. A lot of these organizations have had foreign aid from up to 10 different institutions at any point in time. So, it has become a challenge to try to manage the finances and funds from the different entities. We went to these entities and offered an electronic payment platform called GAPS (GTBank Automated Payment System) which is an in house developed platform that we can customize to assist in managing the funds from respective donor agencies. At the click of a button, they could see what has been spent from each entity independently based on unique identifiers input into the system at the point of expending some of the funds received. This has given us a very positive mark in the market. Today, we bank the Benjamin Mkapa Foundation which is one of the largest local non-governmental institutions in the market. We also bank WaterAid. They all use our platforms today for their aid disbursements to final beneficiaries. They are satisfied that we are customizing things for them on a day to day basis. They are telling other players in the market that it you want a solution to your challenges, go to GTBank because we will listen and provide the solution that they require. We are also playing within the small and medium scale enterprises market in Tanzania based on the fact that Tanzanians significantly save and manage some of their financial activities through cooperative societies which are called SACCOS in the market. In this market, most of the SACCOS still operate through manual record keeping. In Tanzania, we also developed a new platform called GTSACCOS specifically for SACCOS to register all their members with unique identifiers and be able to allow them to contribute and also get short term loans using the GTBank platform. The Tanzania Revenue Authority SACCOS currently uses that platform and that is giving us a good mileage in that sector within the market.

Did COVID-19 have an impact on business for you? Have you changed the way you do business? Did you implement any new strategies to overcome COVID-19 related challenges?

COVID-19 and its challenges are a global issue today that we are all trying to navigate. We have navigated extensively and we will continue to navigate. What was important for us in Guaranty Trust Bank was when the pandemic evolved, we needed to come up with resilient strategies to enable our survival because, irrespective of the fact that there was a pandemic, we needed to remain in existence as an institution. We swiftly moved to digital engagements for banking. We had to take a lot of relationship management which was being done physically and go digital. We went digital for online meetings, reports, ensured that the teams were distributed into groups so we do not have a crisis that shuts down the entire institution, and abided by international preventive and management protocols in line with global health standards. Today in Tanzania, the government has extensively supported the management of the pandemic. Currently, there are three entry tests at the international airports to check the status of individuals coming into the country, every individual is being guided on the use of masks and social distancing, sanitizers are in most institutions, and the government has also brought the vaccine into the country in the last few months. We are encouraging every employee and the government is encouraging Tanzanians to get vaccinated so we can protect ourselves and manage the pandemic better. But in terms of our operations, we have always been a digital institution, but COVID-19 has made us more digital.

How has the penetration of mobile banking been for GTBank in Tanzania so far?

Tanzania is one of the markets with the largest mobile penetration in Africa today. There is extensive utilization of mobile money in the market. To ensure we were competitive in the market at the point of entry, in the first few months, we deployed a mobile hub and a USSD platform that could enable Tanzanians to do bank to bank transfers, internal transfers, and pay for their utilities. This is being enhanced on a daily basis. Language is very critical in Tanzania, so on Guaranty Trust Bank’s USSD platform, you have the option to either use English or Kiswahili which is quite important in this market. This is giving us acceptability. The mobile app is being enhanced on a day to day basis. Account opening can now be done on the mobile app. We are trying to move into capturing of data completely on the mobile app to ensure that customers do not need to come into the physical branch to access services or establish relationships with us. The next point of call is the agency network because that is another very strong service channel in the market. The fintechs and the mobile companies are major competitors. The Tanzanian banking industry lacks a switch in the country today, so transfers from bank to bank are still not instant. However, in the mobile money space, in 30 seconds the transfers are there. For you to encash, there is an agent just 20 to 10 meters away from you. For us to be competitive in this market, we are currently working on deploying an agency network through leveraging of existing networks in the market to ensure that we can reach out more to our customers and the service experience can be very positive.

How are you going to deploy this network to compete with the fintechs?

Collaboration is a key success factor in the market. There are extensive agency networks in the market already and these agents are not tied to a single mobile network or bank. All customers want to see is that they can walk up to the agent next door and they can access their Guaranty Trust Bank services through that agent. The agents are a multiple access point for the customers. We are not going to be reinventing the wheel. There are structured agency networks in the market. We are going to plug in through a collaborative approach with some of these agents that we will be selecting through risk profiling criteria within the bank and ensure that our customers can access services easily and competitively from these agents.

What has been the impact of bancassurance on GTBank since its introduction in 2019?

Banking requires a lot of collaboration which is the key to success now. You have to keep choosing partners and stakeholders to work with to ensure that customers can have the ultimate experience within a single institution. Guaranty Trust Bank Tanzania currently has a working relationship with 7 to 10 major insurance companies in the market, and we are working with them towards alleviating challenges of insured parties in meeting their premium payments to the insurers. The standard regulatory requirement in the market is 100% premium before you get insurance. However, individuals and corporate entities have some cash flow challenges, so they require banks to bridge these gaps for them. We have very strong insurance premium finance products in the market which is supporting access to insurance and giving us the opportunity to tap into the bancassurance initiative. To leverage bancassurance extensively, our customer base needs to be sizable so that we can get to the point where for our personal banking customers and commercial and corporate customers, we can push out insurance products to them based on the collaboration with these insurance companies. We have started with insurance premium finance and we have some services that also require our customers to access insurance from insurance companies. We act as a go-between to getting these services for our customers. We continue to look for opportunities. The successful financial service institution of the future is a complete one stop shop where you can access everything you require without stepping out from that institution. That is the future of Guaranty Trust Bank, which is why recently we evolved from just being a banking institution, a financial institution under the Guaranty Trust Holding Company, to where we will now be rendering payment services, asset management services, and pension services to our growing clientele base across all our footprints in Africa and the United Kingdom.

What is being done in the banking sector and within GTBank to improve cybersecurity?

As we continue to go digital, security remains the ultimate watch word. At Guaranty Trust Bank, our IT infrastructure remains highly secure. We are adopting enhanced security platforms on an ongoing basis, engaging with stakeholders, and sharing lessons across jurisdictions to ensure that we can leverage our regional and global presence to learn from experiences in the market, act proactively, and not fall victim to the cybersecurity challenges. We have very strong firewalls around our systems. Training remains very critical for the team, both internally and externally. We continue to advise our customers on what they should not do digitally and what they need to do. The internal team is also being guided on a daily basis to ensure that the system remains highly secure.

What are some success stories and milestones that you have achieved since the inception of GTBank in Tanzania?

Irrespective of the challenges in the market, performance and success remains the only way to rate the effectiveness of the team on the ground. We are a greenfield franchise in the market and we believe the team is engaging the markets extensively, despite only operating in the market for about 4 years. We have a new platform called the GTSACCOS. We were one of the first banks to integrate fully with the government electronic payment gateway in Tanzania, which is the platform where all government payments are made. That is one ease we have also provided to our customers today. On all of our internet banking platforms or mobile platforms, customers can execute all their government related payments with ease. We also pride ourselves on the ability to have been able to groom young Tanzanians into professional bankers within a four-year timeline. It has not been easy and it has required a lot of handholding and support. But truly, that is one thing we like to do in Guaranty Trust Bank. As a Group, if you look through the entire institution, at every point in time, 75% of the employee base is always below the age of 30 and that is what we have also replicated in Tanzania. Today, bankers of four years in Guaranty Trust Bank attend functions and meetings with bankers with over 10 or 15 years of experience and they can contribute effectively in such meetings. In terms of numbers for the organization, which for a bank is critical, we have ensured that deposit base has been growing at an average of about 50% year on year over the last four years. Revenues have also grown in excess of 50% on a year on year basis in the last four years, ensuring long term sustainability of the institution. The loan book has grown about 90% year on year in the last four years. Despite the 90% growth, our risk profiling criteria remains very strong, in line with acceptable standards within the Group, and this is reflected in our 1.2% non-performing loans ratio today in comparison to the 9% average in the market. This is one critical area of success for us. In the Tanzanian banking industry, most banks that have come into the market in the last 15 years always have very high NPL ratios in their first 10 years. Most of them have only been able to succeed after spending 10 years in the market. By the time Guaranty Trust Bank has spent five years in the market, we would have survived, done it in half the time other banks have done it, and can start chasing becoming a strong tier 2 player in the market.

What is your vision for GTBank Tanzania in the medium term, three years’ time? What would you like to have achieved?

GTBank has operated in the market for 4 years. In the next three years, we have had 7 years in the market. Surely, we would want Guaranty Trust Bank Tanzania to rank head to head with banks that will have done double our period in the market. We will be at the same level with banks that have done 15 years in this market. That is our dream. Most banks that have strong players in this market today have been in the market for a minimum of 25 to 30 years.

What CSR projects are being undertaken by GTBank in Tanzania?

Corporate social responsibility is an integral part of Guaranty Trust Bank as a group. In Tanzania, we remain a greenfield franchise for which there are many initial challenges. Despite that, we are trying to make some contribution within the health sector. Recently, we supported malaria prevention projects in conjunction with the Rotary Club of Dar-es-Salaam Oyster Bay towards eradicating malaria in the market. As we evolve, post our first five years in the market, we will be a major contributor to corporate social responsibilities within the education and health sectors in Tanzania.

What is your inspiration? What drives you to do what you do?

Banking has now become part and parcel of myself as an individual. I have spent the last 23 plus years in the industry. What continues to excite me about banking is the sustained challenges that I encounter in the industry. There is no time for you to sit back and rest. There is always something to address. From my first day in banking 23 years ago, it was like being dropped into the deep end of a swimming pool. What has kept me in banking today, irrespective of those challenges, is that I remain very positive looking for avenues of survival. My career has been built across trying to distinguish myself, irrespective of the challenges that I face. A key milestone in my career when I joined Guaranty Trust Bank was reviving a very challenging business team within the bank that, despite all the challenges, survived. My current experience remains a major milestone in my career. I came into a greenfield environment about four and a half years ago with just a license and I look back four years later and we have a full-fledged operating institution with a team of professional bankers. That continues to give me fulfillment and that is the joy of being in banking. One thing about banking is that you continue to learn every day. I am a science-based individual by background, but when it comes to finance, you are not restricted to finance. You are managing customers in the pharmaceutical space, managing customers in the oil and gas space, managing customers in the personal banking space. You encounter different challenges and you are learning every day. That is what has kept me in banking and will keep me in banking. It continues to challenge me and I continue to learn.

For more information, please visit: www.gtbank.co.tz.

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