A partnership to promote sustainable banking
At the turn of the century, international commercial investors and development financial institutions considered breaking into the Nigerian financial sector. However, Nigeria was classified as ‘very high risk’ and investors considered their options in the country with extreme care, due to lack of corporate governance, transparency and supervision.
In 2003, we begun to cautiously explore business possibilities in Nigeria, searching for selected banks that wanted to raise the standard and do business differently and who understood that adopting best international practices was necessary for long-term success. We found one in Access Bank.
In 2002, two executive directors from a competing local bank took over leadership of Access Bank, ranked as Nigeria’s 65th largest bank at the time. They had a vision to grow rapidly in size and in reputation without compromising on best practices. They faced a long journey and we would be with them every step of the way, with a series of revolving investments starting in 2002 and continuing to the present day.
Like most Nigerian banks, Access Bank is a fully fledged commercial bank serving multiple client segments, including a large corporate portfolio. They were among the first banks to explore less popular segments such as specific lending for agricultural clients. In 2008, they became the first Nigerian bank to strategically develop products and services for women entrepreneurs, including financial technical support and creating web communities.
From policy to practice
Since 2014 Access Bank expanded its environmental and social (E&S) work force and started to integrate E&S factors throughout its credit process. Currently they are a front-runner in the field of E&S governance and business practices. They have also led the way in the adoption of sustainable banking principles. The groupwide environmental and social risk management framework, for example, places a strong emphasis on putting appropriate safeguards in place.
In 2019, the bank issued the first private sector Certified Climate Bond in Africa. It was also the first bank in Africa to join the global Taskforce on Climate-related Financial Disclosures (TCFD). TCFD is an initiative that helps the bank to better measure climate-related risks and opportunities, as well as provides recommendations for climate-related financial disclosure to stakeholders.
As the bank had envisioned, adoption and integration of the best practices had gone hand-in-hand with commercial success. In 2019, following its merger with Diamond Bank, it became Nigeria’s number one bank by assets, deposits and customer base, with operations in Sub-Saharan Africa, the UK, Asia and the Middle East. The bank received also recognition for its efforts in areas such as sustainable banking and support of female entrepreneurs.
Chemistry sparks enduring partnership
The chemistry between us and Access Bank was cultivated from the onset based on our shared goals and ideals. We saw the ripple effect of financing corporates and SMEs, such as; how it enabled the companies to invest in their business, create local jobs, and contribute to real economic development.
Over the years, we have provided Access Bank with a range of equity, mezzanine loans and funding facilities. For example, syndicated transactions, leading a group of European Development Finance Institution lenders and impact investors, thereby mobilizing larger amounts of public and private funds into Africa while diversifying Access Bank’s funding base.
We have also funded technical assistance to help strengthen the bank in key areas such as implementing an SME retail lending strategy and developing environmental and social risk management practices. We helped them to develop their banking on women strategy and set up a joint female leadership journey. In 2019, we supported Access Bank in the pilot of the TCFD.
Since 2017, we have extended our collaboration beyond Nigeria to the bank's subsidiaries in Ghana and Access Bank in the Democratic Republic of Congo (DRC), with several other subsidiaries targeted for 2020/21. Supporting Access Bank DRC, in particular, is an exciting prospect. First, because there are marked parallels with the start of our relationship with Access Bank Nigeria, in terms of the current state of the economy and being the first bank in DRC planning to work on E&S practices. Secondly, because of Access Bank DRC's commitment to collaborate with us on developing an E&S risk management framework with a strong focus on human rights, a critical area given the country’s war-torn recent history.