With nearly 30 deposit money banks already operating within the Nigerian financial space, starting a new bank may be a challenge, especially in an area that is still in its early days in the country. For Lotus Bank, the challenge became the encouragement that it needed to address financial inclusion and help in the cause of growing the Nigerian economy.
Its entrance into the Nigerian banking space made it the third non-interest bank in the country and the first that started operations from the southern part of the country. By the time Lotus Bank marked its first-year anniversary in July this year, it already had more than 20 branches spread across the country and had been able to pull customers from all walks of life into its embrace.
A customer of the Bank who spoke with LEADERSHIP explained that he was drawn to the bank through the testimony of one of his customers of the excellent banking experience and warmth of the bank’s staff. “I did not know anything about ethical banking until I started banking with Lotus Bank. I must confess that it has been a wonderful experience,” said the trader based at Aluminum Village in Dopemu, Lagos who preferred anonymity.
Providing Ethical Prosperity
This may not be farfetched from the goal of the bank which according to the managing director and chief executive of the bank, Mrs. Kafilat Araoye, is to proffer innovative solutions that will help provide ethical prosperity for all stakeholders, be it government, corporates, commercial and retail.
In starting Lotus Bank, she explained that “there were quite a number of banks when we came into the market. So, what we did was to access the need out there, look at our target market segment and in segmenting, we looked at where we believe we should play which is in non-interest finance.”
Speaking to LEADERSHIP, Araoye, one of the few women at the helms of deposit money banks in Nigeria, said, “We also realised that all banks Nigeria cannot actually satisfy the needs of the demographic of Nigerians. Today, we have around 200 million people and at the time we came in, there were less than 30 banks. So, definitely we are underbanked. We also realise that banks were now concentrating more on being digital, competing with the fintechs,but there are still banking needs that people require,” she added.
Noting that with more than 30 per cent of adult Nigerians still out of the financial system, Lotus Bank had focused on the unbanked and underbanked. The bank remains committed to ensuring financial inclusion as well as exports and agric financing to ensure the growth and development of the Nigerian economy she said.
Award for Impactful Banking
Last week Tuesday, the CEO of Lotus Bank played host to the management team of LEADERSHIP Group Limited, publishers of LEADERSHIP titles who came deliver the official letter of notification of LEADERSHIP Bank of the Year Award 2023 to her.
LEADERSHIP Group Limited vice chairman, Mike Okpere who led the team while presenting the Notification Letter to Mrs. Araoye stated that the LEADERSHIP Conference and Awards would hold on January 31, 2023 at the International Conference Centre, Abuja, FCT.
Okpere said though, young in age, the impact of Lotus Bank is already being felt within the Nigerian economy. “Lotus Bank was nominated as LEADERHIP Bank of the Year 2022 for its drive and impact on improving financial inclusion in Nigeria, boosting non-oil export earnings of the country in less than two years since it obtained a banking license and recognizing its efforts towards economic growth and pursuit of ethical banking,” he said.
Receiving the letter, Araoye noted that the award came as a surprise to her and the bank saying, “we were just doing what we can to ensure that Nigeria achieves financial inclusion and also help businesses particularly exporters in such a way that the country would be able to generate the needed foreign exchange.
“One of the purposes of setting up Lotus Bank is to actually add value to the society. What we have done for most of this year is to go to places where people don’t normally go to, both north and south and try to educate them on why they should have a bank account. We did not even see the cashless coming up, we just had a desire for Nigeria, where we should be as a country.
“People should be financially included, we should finance them, we should try to increase our agricultural output and our export to reduce pressure on our foreign exchange. we did not know that the things we were doing were being noticed and we appreciate the honour that is being bestowed on us,” she while also commending LEADERSHIP for being able to set itself on a high pedestal of professionalism in journalism in Nigeria.
Innovating to People’s Needs
Enumerating on the bank’s passion for financial inclusion, Araoye said “there is this belief that financial inclusion has been slow because of poverty, but it is a chicken and egg situation. If you are banked, you are helped into prosperity. By the time they are relating with you and giving you opportunities along the way you will go into prosperity even if you are a trader.”
For the unbanked, she said the goal of financial inclusion “Is about helping them to understand that they need a bank because if you are in business, you need guidance. Part of our intention is to encourage financial literacy. Yes, people do bank but many of them are not literate about banking. we see a lot of comments that show that we still need to educate people.”
On what the bank is doing differently, she explained that “we had done our homework prior to starting. We actually went on the research journey. We went to different areas of Lagos and Abuja and Kano. We selected at least three areas of Nigeria to understand and at the end of the day, we came up with a footprint. When we started within the first three months, we had opened like five branches.
“The second thing is we came up with innovative service solutions like the paperless bankingwhere you come in, you don’t have to fill in any form to withdraw money from the banking hall. We also have this idea around of a one-stop person talking to you and not be referred around the bank. So, one person is telling you everything you need to know about banking, including financial advisory.
“We have two types of branches, the hybrid of the bricks and mortar- the regular branch – and then we have what we call the digital service centres where you will not find physical tellers but then you can do all banking service. We also have a department that look into customising customer journey, or customer experience, Araoye said.
Lotus Bank according to her, has the mantra of partnership for progress and prosper with itscustomers. “If we are going to partner, we must understand your business. There is a department that is working on that, understanding their business and proffering solutions along the way along- the value chain. The most critical part of banking is to understand your customer, understand their pain points, and then proffer solutions that attend to the pain points,” Araoye concluded.
Tech Driving Banking
Lotus Bank is one of Nigeria’s three Non-Interest Bank (NIB), which in just over one year of its existence in the country, has become the choice of many at the grassroot. It has within a short period grown its branch network to over 25, with more to be opened up for operations as it focuses on expanding Nigeria’s financial inclusion through the use of technology.
Asides this, the bank is also imprinting its mark in the agriculture and export financing aspect of the financial industry as well as building capacity for its growing customer base. Lotus Bank is the first non-interest bank to commence operations from South-west, Nigeria with a focus to serve people of all faith.
The bank was founded and is chaired by Mrs. Hajara Adeola, who is also the Managing Director of Lotus Capital (the pioneers of non-interest finance in Nigeria). Launched in July 2021, almost 10 years after NIB began in Nigeria, Lotus Bank currently has around 26 branches and several agent outlets that allows it to use technology to reach out to its target customers.
The bank, though its technologically innovative products have been able to spur the interest of youths and the younger tech driven generation in non-interest financial products. Not only does Lotus Bank make ethical funds available for its customers, it also builds capacity and create forums that would help its customers build their businesses better.
