Sierra Leone: on the path to financial inclusion

Banking & Finance
| The European | 1st August 2019
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Sierra Leone is a nation on a journey of self-discovery, working hard to convert its vast riches into economic wealth and social wellbeing for the benefit of its 7.4 million people. The country is blessed with an abundance of mineral resources, including diamonds, chromite, rutile (among the largest reserves in the world), iron ore, titanium ores, bauxite, gold, platinum, fishery resources and arable land, all of which have been poorly exploited. Sierra Leone remains among the world’s poorest countries, ranking 184th out of 189 countries in the Human Development Index report for 2018.

The Sierra Leone’s economy grew at an annual rate of 7.8% over the period 2003-2014 but was undone in 2015 when it contracted by 20.5% due to the double impacts of the collapse of the two major iron mining companies, Africa Minerals Limited and London Mining. This severe downturn was caused by the fall in international iron ore prices and the outbreak of the deadly Ebola virus which led to the collapse of many businesses and caused unprecedented loss of jobs. Today, 60% of the youth in Sierra Leone are either under- or unemployed.

Reaching out

There is now a general acceptance that the financial sector has a central role to play in combating the current high level of poverty and income inequality. Integral to this is the provision of financial access to the excluded 87% of the population, the bulk of whom are rural-based and dependent on subsistence agriculture for survival. The central bank expects financial inclusivity to accelerate growth and empower the population with financial and employment opportunities, therefore reducing income inequality and poverty. As part of its programme to promote social cohesion and shared economic development, Sierra Leone’s central bank launched the National Strategy for Financial Inclusion in 2017, to make financial services available, accessible and affordable to all Sierra Leoneans and MSMEs, and support inclusive and resilient private-sector led growth.

Guaranty Trust Bank (SL) Limited

The entrance of Guaranty Trust Bank (Sierra Leone) Limited, a subsidiary of Guaranty Trust Bank Nigeria, into Sierra Leone in 2002 has radically transformed the entire banking landscape and brought it in line with the fast-paced, customer-centric, technology-driven banking of the modern day. The suite of innovative financial products and services is designed to meet the divergent needs of the people, and has helped to expand the economy. Also, a vast expansion in the branch networks has helped some of the under-served and unbanked population to be reached. There is also an improvement in efficiency, triggered by the introduction of more advanced technology and increased competition among industry players.

The performance of GTBank (SL) in Sierra Leone market has transformed it into a household name in the corporate and consumer banking industry. With consistent delivery of efficient services, innovation and year-on-year growth, the bank has been among the most profitable and best run in the country over the past six years. This performance has been in the face of challenging market conditions and fierce competition in the industry. GTBank (SL) has achieved market dominance in both the upper corporate banking and middle commercial banking segments of the market. It intends to achieve the same in the lower retail and SME segments of the market with a view to achieving financial inclusion objectives, the accumulation of social capital and mobilising cheap deposit liabilities.

The bank recently launched its five-year growth plan, which is based around the expansion of its retail footprint across the country. The strategy involves leveraging partnerships with fintech companies to provide customers with innovative digital products designed to meet diverse needs and delivered in a cost-effective manner. Through these partnerships, GTBank (SL) has set the pace in digital banking in Sierra Leone. It pioneered the rollout of several products including SMS banking, the first MasterCard debit card denominated in the local currency and internet banking.  The bank was also instrumental in the deployment of ATMs across the country and the installation of Point of Sale (POS) terminals at various merchant locations to facilitate cashless transactions within the economy. 

Looking to the future

Through GT-SIMPAY, GTBank (SL) is making a real difference by providing customers with a platform to bank independently, pay bills and purchase airtime. With the next phase of the GT-SIMPAY revolution, the lives of both the banked population and the unbanked population will be positively impacted. The GT-SIMPAY mobile wallet feature enables customers to send money from their accounts to beneficiaries’ mobile money accounts, utilising Global System for Mobile Communications (GSM) networks. The beneficiaries can then cash out from mobile money agents

It is worth mentioning that GT-SIMPAY has just been awarded ‘Best Mobile Initiative, Application or Programme in West Africa for 2019’ by The Asian Banker firmly placing Sierra Leone on Africa’s digital banking map. A new product soon to be rolled out is the e-Cheque – a feature that allows customers to send money to friends and family who do not have accounts with GTBank (SL). With the e-cheque code generated and sent via SMS, it won’t be long before traders at the popular Abacha market in Freetown will be able to accept non-cash payment through the bank’s Scan-to Pay QR feature – a major step towards building financial inclusion and creating new opportunities in Sierra Leone.

The implementation of a national switch (a system operated either privately or by the central bank that helps to connect local banks) in Sierra Leone will provide the required connectivity between the local banks and by extension facilitate inter-bank transactions and will further enhance financial inclusion in the country. Unfortunately this project has been delayed, mainly due to a lack of financial resources to kick-start the project and a bureaucratic decision-making processes. However, the World Bank has recently granted the Government of Sierra Leone a long-term loan towards the implementation of the national switch and it is expected that it will be operational before the end of this year.

*3737# Banking

To meet the many needs of its growing customer base, GTBank (SL) plans to roll another digital mobile product called *3737# by the middle of 2019 – a product that has been very successful in Nigeria since its launch in 2016. Despite 87% of Sierra Leone’s population being without access to financial services, 57% have access to mobile phones. This translates to 4,218,000 unique subscribers that can potentially have access to financial services through their mobile phones. GTBank (SL) has therefore partnered with one of the major GSM operators in the country to provide banking services to subscribers on their network. The potential of exponentially increasing the rate of financial inclusion in the country is huge, as opening a bank account takes minutes via a mobile phone.

To ensure that the objective of financial inclusion is achieved, this product not only functions on smartphones but also on the more basic phones used by the bulk of the population. Further evidence that GTBank (SL) is dedicated to serving the people of Sierra Leone.

Further information

www.gtb.sl

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