Chief Ayakeme Whisky is a financial expert, politician and former commissioner in Bayelsa. Currently, Whisky is the chairman, Board of Directors, Izon Micro Finance Bank owned by the Bayelsa state government. In this exclusive with TNN’s JOHN ODHE, in Yenagoa, he spoke on the reliability of the financial institution and why the eight local government councils, corporate and individual business owners should patronize the Izon Micro Finance Bank.
What is the current situation of the Bayelsa State owned Izon Micro Finance Bank which is now under your Chairmanship?
Actually, the bank was established by the past administration led by the former governor, Seriake Dickson to provide what we call financial inclusion. In other words, it’s to serve as a vehicle to activate economic activities across the state and in the process create wealth for Bayelsans. To that extent, the vision was noble. The objective was very germane because every economy needs a vehicle for financial intermediation like this to support the medium and small scale enterprises. As you know, the hub of all economy spins on the medium and small scale enterprises. They are the largest employer of labour. No economy thrives without a viral, active medium and small scale enterprises. So, when you aggregate all that, you realize the vision of the past administration headed by Senator Seriake Dickson. It was indeed very noble. But however, since inception, we have come to realize that the implementation of that vision was not in tandem with the primary objective. So, my board has the responsibility of trying to rejig the vision to make it proactive, pungent and goal oriented. The books were not very tidy when we came on board. So, part of our responsibility is to create an ambience for performance to change the entire trajectory. That’s what we have been doing and that’s what we will continue to do. At the time, the bank became under -capitalized and of course, in order to secure investors’ and depositors’ interest, the Central Bank, sometime last year before the COVID-19 pandemic, had directed the micro finance banks to increase their shareholder funds. For ours that is state owned, we were to raise our equity to one billion naira. Before we came on board, the previous board and management was struggling to meet that regulatory requirement with some bit of constraints and because of that, the bank’s capital outlook was poor. But thank God for the governor of the state, Senator Douye Diri, who is keen in transforming the bank. He is committed to strengthening the bank. And my board has made a vow to him that we are going to run the bank in an efficient, effective professional manner and that’s what we have been doing. So the governor graciously provided some funding. We are not there yet because we are looking for a billion naira. With the governor’s last provision, we are now at some level. By the time CBN admits all that we have provided, our shareholder funds would have increased from one hundred million to four hundred million. Like I said, we are not there yet because we are still looking for about six hundred million naira to be able to satisfy the CBN regulatory threshold of one billion naira.
As a financial expert, how do you intend to get the CBN regulatory requirement?
You must understand that shareholder funds and equity come from the owners of the bank. It is the owners that will make it available. So, our shareholders are the Ministry of Finance Incorporated and another agency of government. Those are the shareholders. So, it is the responsibility of government to raise the one billion naira. We still have a window up to 30th of April, 2022 to meet that one billion naira requirement. So, we don’t have a problem.
If the state government fails to meet the deadline for the requirement, what happens to the bank?
Government cannot fail to meet that threshold because government itself knows the consequences. Because if CBN says we must recapitalize to a particular level, if you fail, they seize your license and that will be too dangerous for us. The government is not unaware of that and this requires sacrificing to meet that requirement which l have no doubts government would do. Unfortunately, we are also not unaware of the sliding of government’s fortunes in terms of the in-flows from the federation account in the face of increasing government expenditure. You know this governor is doing a lot in terms of infrastructure, handling major roads at this time. That has its own impact on the state’s finances. But without prejudice, I know that this is an asset government would not want to lose. Assuming we are not doing enough to change the trajectory, that probably would have accounted for government’s disinterest. But since the board and management are working hard to change the trajectory, government will see the bank more as an asset that can contribute meaningfully to galvanising the local economy of the state. To that extent, l have no doubts that the state will meet the CBN regulatory requirement.
We understand that the state government is making moves in ensuring that the eight local government councils in the state transact business with the Izon Micro Finance Bank, are you aware?
The bank was made to open branches in all the local government headquarters with the aim of facilitating economic activities. From the beginning, the bank was seen as the hub on which medium and small scale enterprises can spin. And that is the only way to advance the quest for financial inclusion. What is Banking? Banking is getting deposits from those who have excess to save and lending to those who need money to operate. That’s banking. There are two major sources of revenue to banks. One is service income and the other one is interest income. When we have enough costumers and in every drawing, we collect our small account maintenance fees and we charge a token for other similar services like issuing of check books, charging on alerts and similar services; by the time you aggregate all that, it becomes a little bit lumpy to impact on profitability. Similarly, if we have the capital as a bank, and when those who need money come and we are able to advance loans to them, salary advances and we charge on that, that is what constitutes interest income. These are the two main bank revenues that will ultimately lead to profitability if management is proactive enough to control expenses. So, having that at the back of our minds, we, as a board are taking a cry to our local councils. We are not saying they should give us the allocations of the councils to keep. No. We are taking a cry to the councils to pay their staff salaries through us. It’s not the allocation of councils but we are saying that component of salaries; give it us so, that as a bank we can pay the staff. Whether we like it or not, this is a Bayelsa state government bank, this is an Ijaw people’s bank. You can’t abandon one of your own and be patronizing banks of individuals and other states. No effort is too small. Wema Bank that has become a national bank today started as a regional bank by late Chief Obafemi Awolowo. It started as a regional bank, it grew. This was the bank that supported the economic activities of the western region. And the western region became the most developed region in terms of economic activities, educational activities, everything in this country. Today, Wema Bank has grown to a national bank with branches everywhere. But I can tell you this, you go and take a survey of the Yoruba people in Bayelsa state and assess the bank they patronize most and you will discover it’s Wema Bank. This is because the people are very nostalgic about it. ‘This is our own.’ So, nothing stops Izon Micro Finance Bank from growing to a point tomorrow where we can apply for commercial license. Nothing stops us but before we get to that point, how many of our Ijaw people buy into this? The beginning point should be our local government councils because the employees there are Ijaw people and that is government’s money. So, for us, if we must grow this bank, the first point of call is our local government councils to give us all their staff salaries accounts, both political and non political. Once that is done, it is going to change the narrative of the bank from the one that had been making losses to the one that has become profitable. And when we make profit, where is our profit going? It is going to our shareholders. And who are our shareholders? It’s the Bayelsa state government, and with that added fund to the coffers of the state government, no matter how small, it can build the capacity of government to carry out one small project. It could even be a N20 million, N50 million projects when it comes to making profits and paying in dividends. That’s our focus.
What is the current situation of the branches of the bank in local government headquarters?
That is why we are calling on the councils to patronize us. We are the only bank that has branches in all the eight local government councils headquarters. No other deposit money bank has branches in the council headquarters apart from us. The whole idea is to bring banking services closer to the people for complete financial inclusion objective. Our banks are doing well. We are fully automated to perform. There’s nothing indeed from the mainstream money banks that you can’t find in our bank. We have an application with which you can operate an account with us anywhere. Our application is known as Bank 1 Mobile App. When you open an account and you have this app installed on your phone, you can make transaction. In my small farm, my staff pays cash there for saves because I opened an account with the Sagbama Brach of the Izon Micro Finance Bank. I sit here in my office and see the alerts and l pay my creditors through my app. So, it’s not something that is too difficult to do, it is doable. You suffer no handicap having an account with us. We also issue our costumers with ATM cards. If you have an account with us, for instance, in Brass local government area and you want to come to Yenagoa, with your ATM card, you can draw from any bank because our bank is fully automated. When you know you can’t suffer any handicap by operating with us, why do you need to go to any other bank when you have one of your own? It is only when we are able to build our own that we can grow.
What is your advice to Bayelsans in terms of patronizing the Izon Micro Finance Bank?
The lzon Micro Finance Bank is a bank Bayelsans can trust. It is your bank, it is my bank, it is our bank. Nobody can make it bigger apart from ourselves. We are there to help the small trader in the village and the small trader in the town. This bank is built essentially to support the small and medium scale enterprises. It is only when we grow the small and medium scale enterprises based that Bayelsa state economy can grow. A growth in the Bayelsa state economy will percolate into so many benefits for everybody. I am happy that those employees that have direct bearings with the local government administration; the medical workers, the Nigerian Union of Teachers, Nigerian Union of Local Government Employees, there are some elements of trust in their leaderships, and they are thinking in the right ways to resolve whatever fears they have with a view to patronizing our bank. Similarly, if you are a Bayelsan and you are a trader, you are a small business man or woman, this is the bank to come. If you come to us with viable business options, we will look at it and support you. Presently, we are taking steps to build capacities in the bank. Since I became Chairman, l have organised two training sessions for my staff because I believe in capacity building. We must be building the requisite capacities that will match the expected performance. So, my appeal to all Bayelsans, political staff, civil servants, come over to lzon Micro Finance Bank because it is a bank you can trust.
What is your take on the E-Naira recently introduced by President Muhammadu Buhari?
The E-Naira wallet essentially is a product designed to ease payment in seamless manner. I have been listening to a lot of public commentaries on it. In the advanced countries, nobody is advised to carry cash. Even with the ATM, sometimes you are encountered with network problems. I think this device by the CBN is to further ease the process of none cash transaction. I have not operated it so I don’t know the modalities of its effectiveness. But essentially, it would move us from a cash prone economy to a cashless economy. I also want to believe that if it is useful using it abroad, it is one way of bringing down the pressure on our foreign exchange reserves. Because if I am outside Nigeria and I want to pay you money, l take your account details, l go to my wallet, put in the figures and I pay you. The incidence of all of us going to look for dollars to buy won’t be necessary. If you want to travel, you go to buy dollar, put it in your domiciliary account and link it to your dollar denominated ATM. The fact that I am going to buy dollar also brings pressure on the dollar. But my only worry is that Nigerians are always too smart for every new product. I just hope that there are enough safety valves programmed for this product to avoid its abuse.