Mike Nyinaku speaks on the Beige evolution
The Chief Executive Officer of financial services providers, The BEIGE Group (TBG), Mr Mike Nyinaku, has expressed optimism about the future of the group, especially following recent foray into other financial services.
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Recently, The BEIGE Group has acquired interests on other financial services including pensions and insurance.
Commenting on some current happenings within the firm in an interview with the Daily Graphic, Mr Nyinaku said the BEIGE story had not been without challenges but at every stage, they were resolute in the pursuit and execution of their corporate strategy, and “this is what has largely accounted for the current status.”
Challenges
Key among the challenges since inception, Mr Nyinaku stated, was customer perception., premised on the position that banking and finance was an old age business, known to be usually practised by very old people.
“When we started BEIGE, we were fairly young and it was difficult to get people persuaded that boys as young we were, to be trusted with people’s hard earned funds. We did not have any long history of work experience in banking nor had we inherited some huge capital to show. Hence eliciting confidence in the customer was a herculean task. It was a difficult thing to get customers to believe in us. Even competition wrote us off as they felt we did not have what it takes to run such a business.”
Besides, he said, competition did not leave them alone as it preyed on staff of the company sometimes.
“Somehow, there seemed to be an orchestrated attempt to either spread false information about us in the industry. Luckily, we did not get derailed by that at all and I’m glad we remained focused. Even in these times of triumph, there are still little flushes of that in the environment.”
The BEIGE Group CEO said the company also had a major challenge with people as it did not have the muscle to afford very experienced talent and where it bent over backwards to have them “we so easily lost them to competition.”
“Still with the people issue, there was the difficulty in finding persons with integrity or persons who were not self-seeking. That was and continues to be a real challenge,” Mr Nyinaku reminisced.
Regulation
The BEIGE boss stressed that when they started the firm, the Bank of Ghana at the time had not introduced a law to regulate the operation of microfinance instituions. Therefore, in order for them to be able to accept deposits from people, they had to operate two distinct institutions without falling foul of the law nor confusing the customer.
The BoG later on saw the need to harmonise regulation for both functions to be performed by one institution, saying the regulator had provided a lot of guidance to them throughout each stage of the business.
“I hold strongly the view that regulation must be dynamic and without a doubt the BoG has demonstrated so to us. In this fast changing world, the rules must not and cannot be cast in stone. Technology, competition and entrepreneurship have so much changed how things happen that you cannot be stuck in your ways,” he posited.
He also reiterated that the customer had so much choice now that if businesses do not evolve to satisfy them they would lose out.
Mr Nyinaku said most of the regulation in the industry was designed with an intention to minimise risk and protect depositors’ funds, introduced at a time when there was little competition, thus some of the guidelines could not take account of the impact of a changing world on business processes.
“I believe that it would be a positive catalyst to business development and by extension national development if all our regulators would keep an open mind to changes happening in the business environment and their impact on how service practitioners deliver their services,” he suggested.
The distribution channel
In spite of the challenges, The BEIGE Group CEO said they had survived mainly because they knew what they were about. “When we started BEIGE, we had a clear strategic intent. Our goal was to build a platform for the delivery of a broad range of financial services within 10 years. These include banking, pensions, insurance and variety of investment services.” The bank or BEIGE Capital Savings and Loans (BCSL) served as the distribution channel and that explained why it was rolled out first.
“I would be quick to confess, looking at how everything has unfolded, that God has been good to us. The model has worked and surprisingly we are on schedule. With about 2,000 staff and offices in seven regions, BCSL has become the preferred bank for the informal sector.
“Due mainly to the proximity of our branches to the niche marketing centres, the flexibility of our internal processes and the competitiveness of our pricing, we are actively modernising and modifying micro-banking.”
He disclosed that the state of investments the group had made in infrastructure, technology and talent development would suffice, even if the volume of business increased by five-fold.
The evolution
Riding on the success of BCSL, BEIGE is now a complete financial services supermarket. The BEIGE Group, through its subsidiaries now offers services in banking, pensions, insurance and investments.
Together with its subsidiaries and affiliates, TBG is providing direct employment to about 4,000 people and serving a clientele base in excess of 600,000.
