Sierra Leone: Interview with Dr. J. Sanpha Koroma

Dr. J. Sanpha Koroma

Founder and CEO (Union Trust Bank Limited)

Dr. J. Sanpha Koroma

The financial sector is strong and stable in this country.  It has supported the economy during its growth and has maintained a major focus in straightening the country’s economy and will probably help the economy grow even further.  Can you give us an overall view of the financial sector in the country-What are the main strengths and weaknesses?

The financial sector in any economy is very important both in the private sector as well as in government.  The government depends on the private sector and on the banking system for its own sustainability in terms of taxes, in terms of moving things, and providing access to comers and facilities.  In Sierra Leone like any other country, we in the banking system provide the same services; payments, clearances, circulation of currency in the remote areas.  We have a lot of banks in this country but essentially, apart from the Central Bank, we have three (3) banks that have 100% Sierra Leone ownership.  That is, the Sierra Leone Commercial Bank, Rokel Commercial Bank which was Barclays Bank until the government bought majority shares of 51% in 2000 leaving the private sector with 49%, and then Union Trust Bank which is basically the only indigenous private commercial bank which has 100% private sector in it with a few strategic partnership but it is essentially a Sierra Leonean bank.  The rest of the banks (i.e 13 banks) are foreign, mainly Nigerian banks.

The main opportunity in the banking system is the robustness of the economy if the economy is buoyant the banking system will be buoyant. But if the economy is sluggish, like we have experienced in the last couple of years both globally and nationally, commodities prices went down, for us in Sierra Leone we have experienced Ebola.  So we are now trying to recover from that but there is still room for intervention by our strategic partners, particularly the World Bank, the Africa Development Bank and other international financial institutions.  These are the ones that provide us with the necessary support to expand our operations and we are working towards that direction.  

The Islamic Development Bank is providing us a facility particularly for SME. Presently, we have a delegation from the Africa Development Bank.  We are discussing facility for women entrepreneurship development, so we depend on our strategic partners for SME development, which is key to the banking system.  We somehow happen to have an edge over some of the banks on SME because of our coverage in the country and our business model.

The World Bank has forecast 4-5% growth of the Sierra Leone economy in 2017.  Do you think that there is a sense of recovery from those two external and internal shocks that the country has experienced?

I really do not put a lot of emphasis on these forecasts.  In this country, official figures have once put economic growth of 50%.  In my experience, I have never seen any economy that has grown 50% in the history of economic growth.  There are certain sectors that drive the economy.  Agriculture is one; the financial sector is a supporting sector.  I do not believe when people fly these figures around saying the economy has grown to 6%.  From which stand point?  I do not believe that.  Prosperity from the economic point of view is not easy to measure.  When you look at what is happening in the economy, you can even measure prosperity from the faces of people when passing around carry gloomy faces, you will know that there is no prosperity.  So it is hard to put figures on that kind of situation; so I have my own doubts about these figures going, 6%, 7% and some atrocious figures like 50%.  We are trying to make things happen here; the government is trying in its own way with all the setbacks, but we see the mining sector coming up again.  Now that iron ore prices are recovering we will see how far that takes us and just hope that with the support we are anticipating from our traditional partners, we will make a headway.   I do not call them donors because it is wrong: no one will just come and say I donate to you, you have to deserve and show value for it and so I call them strategic partners.  They are coming along well.   The World Bank is always there, it is the traditional partner.  The African Development Bank is very strong.  The other international banks are also key.  So basically that is where we are, we are looking forward to growth in our own commercial banking operations consistent with how the economy is growing.

Union Trust Bank Limited was in cooperated on the 26th April 1995.  We are talking about over 20 years of experience in the banking sector.  Can you give us a bit of a history about how things started?  How did you establish yourself as the founder and CEO?

It is an idea I have had before, I have worked in finance all my life.  In 1995, I had just returned from Nigeria after four (4) years of working in the financial sector there.  I had seen how all of these banks in Nigeria started between 1992 and 1994.  I came here and thought that we should start a bank.  I just launched into it, did my feasibility and once I finished all the incorporation and everything, something happened that really pushed that idea.  We had a local bank here that was experiencing problems.  We saw that as an opportunity and I was granted the offer to see how much I could do to ensure that customers’ deposits were safe, and that was the first clientele I had, getting those customers out of that bank while the company went into liquidation.  That is how Union Trust Bank started.

We have the required number of private companies and in our laws you have to have less than 51 shareholders to qualify you for a private company.  But if you go beyond that, it becomes a public company.  So Union Trust Bank is a private company because it has less than 51 shareholders.  So it is the only private indigenous bank in this country.  The other Nigerian banks are all public companies in their home countries.   Most of them you hear PLC and they come here in that status.  Most of them have 100% Nigerian shareholding, so they are purely subsidiaries of those home-base companies.  One of the other two Sierra Leone banks The Sierra Leone Commercial Bank is 100% government owned. The Rokel Commercial Bank both public and private but government has 65% shareholding and the private shareholders have about 35%.

The Union Trust Bank has about eleven (11) main branches and we have other outlets scattered all around the country. We have the largest geographical network in the country.  Directly, we have about 280 employees.  We have products and services that cover the entire country,  For instance, for Western Union we have the largest franchise and we introduced it 21 years ago, and for five (5) years we were the only agent with the franchise.  Today four (4) other banks have the franchise but we still maintain leadership and covering the whole country and impacting everybody.

What is the percentage of cooperate customers that you have compared to normal customers?

We do not have such statistics, but at the end of every year the Central Bank gives the ranking of banks, that is big banks and small banks and we were among the big banks according to the Central Bank’s own estimation.  The Central Bank is the only institution that has information for every bank.  We were among the five (5) big banks, but it is not fixed because every year balance sheets change.

Union Trust Bank is only present here in Sierra Leone, are you thinking of partnering with other banks in other countries?

No, it is not fashionable now.  I mean look at all the global banks like Barclays, HSBC and others they are all shrinking.  I do not think there is an economic gain in that for any bank.  If you are strong nationally that could be your market and you can make the best out of your market.  There are many disadvantages in a regional global franchise, we want to remain a Sierra Leone Bank and fully private.

Out of the thirteen (13) banks and out of mainly the five (5) banks that are on top what makes Union Trust Bank differentiate itself from these other remaining banks?

The first important thing is your business model.  Our business model is different from all of them.  We are serving the Sierra Leonean economy and we have among us in our management and staff a repository of knowledge of this economy that no bank has.  Our structure, for instance if you take our board of directors, they are all either bankers from the Central Bank or from appropriate key sectors in the economy.  Also, we are unique in our cooperate structure.  We do not just employ people to be directors. You have to qualify for the position; qualify in the sense you must be a shareholder and should know what banking means and what it takes to run a bank.  You do not just come there to get a sitting fee; you have to contribute meaningfully and bring experience and value into the bank that is important as well.

We are going after the sectors that matter.  We are not just running after money.  Take SME for instance; majority of the people in this country are small-scale rural people.  We go to rural areas, spend money and establish branches in order to reach them.  Others are in Freetown chasing the big companies.  If they have to move, they only go where the miners are; but they do not go out there to serve the population and that is what we do.  We have the biggest SME portfolio and we are everywhere.  That is why we get the support of some of our strategic partners who believe in our model.

You have mentioned agriculture you seem to have a major focus on developing this sector-How are you planning to offer financial products and services in other to boost that sector?

Agriculture is a very difficult sector to fund because there is such a large exposure of government in agriculture.  It is also an area that is not easily penetrated.  Farmers are almost everywhere in the country.  Most of them are not literate and most of them depend on the government for subsidies in terms of fertilizers, inputs that the government give them directly.  The government does not use banks as such.  What they do is create their own institutions such as village banks or community support services.  So the Ministry of Agriculture, which basically uses these structures that they create themselves, do not depend on banks.  They pay out monies directly to farmers.  So when we give supporting services, we move money where it is needed and we also cooperate with other agencies like Unicef, World Food Programme and other agencies to co-finance agricultural enterprises.  We are also into fisheries and poultry, these are organized agricultural enterprises and we fund these areas directly.

How do you see financial inclusion in this country?

We have been in financial inclusion for a long time.  It is only now that the Central Bank is having a national strategy for financial inclusion.  We have been there all the time even before they developed a strategy.  We had our own strategy.  If only you look at our calendars, our documents, you will see that we are in financial inclusion.

You were governor of the Central Bank, you have been Managing Director at the National Development Bank, Deputy Financial Secretary at the Ministry of Finance and last but not the least one of the few Sierra Leonean banks owned by Sierra Leoneans and you were honoured by the Cambridge University making history here in Sierra Leone.  What has been your biggest achievement over time?

I have had the real privilege of serving my country in many capacities principally in the finance and banking industry.  I have set up lot of institutions in this country that are still doing well.  I established The National Authorizing Office which is the office coordinating aid from European communities.  I also set up NASSIT when I was governor and The Sierra Leone Road Transport Cooperation and became the first Chairman.  So I think I have and continue to render service to my country, this may be the last, I do not know, but I am here to let this one thrive and survive.

How do you see yourself in the next five (5) to ten (10) years?

Getting older and work when I can.

Could you please leave us a personal message to our eBizguides readership in other to attract investors to Sierra Leone?

The Sierra Leone economy has lots of potentials, but the problem is that investors come in various forms.  Some hear about diamonds they want to come and get it within a week and go away or you come to get a license for iron ore and when you get it you go and find somebody to sell the licenses.  Investment does not work that way.  You have to know the country to see what the potentials are and be genuine when investing in that country.  I hope we have genuine investors and also when they come they should look for those who know the economy to partner with them.  So genuine investors are welcome especially those who come to look at real institutions that deliver what Sierra Leoneans need for their daily life and the development of the country.