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The Standard Bank of South Africa: The Paradigm to Sustainable Development (Part II) By Lambert Mbom

In the general class of banking, connoisseurs will attest to the fact that the Standard Chartered Bank belongs to the top-notch eschelon. Often its employees come from la crème de la crème. The question then becomes what is unique about the Standard Bank of South Africa?

My fascination with the Standard bank of South Africa www.standardbank.com stems from the fact that it is of African parentage. This is a very big deal. It sure is an overstatement to opine that financial institutions of African roots have an abbreviated lifespan. This is borne out by the many tales people recount of how they have lost money in different schemes that are excellent on paper and never as much as took off even though designed by the best brains with record level experience and outstanding expertise. In addition, these stories are many. Any financial institution then that has survived the momentous challenges so pervasive in the culture deserves a “red-feather”.

Three things the Standard bank of South Africa is proud of and gladly trumpets are its South African roots, its global reach and its age 148 years. These neatly sum up the bank’s “palmares”.  For many of us from Africa not exposed to the riches of our motherland aside from occasional ejaculations of success stories, such records make us proud. This bank born on African soil with a centenarian experience having patiently borne with equanimity the vicissitudes characteristic of such an enterprise – an unfortunate curse of the continent – is a force to reckon with. There is no denying it that many such institutions hardly survive for long. We must doff our hats to Standard Bank of South Africa for rising to the occasion and making its name in a trade that seemingly is the exclusive preserve of the West divinely willed to it.

The wisdom of old age is one that as Africans we prize very highly; hence if the Standard bank of South Africa has succeeded for all these years, it sure will continue to leave its mark.

Of equal weight and importance is also the blessing that this bank has British roots. There is no denying it that while it remains a moot point, the Anglo-Saxon culture bags a summa cum laude grade in accountability and transparency. Did I read somewhere that countries colonized by Her Majesty have fared pretty well than those of their French counterparts? Let us remember too that the US, the world’s premier super power has British or if you prefer English ancestry. Not that I have anything particular against the French and their francophone offspring even though given their malfeasance record in Africa and in Cameroon, such an aversion would just be in order. I am no Francophobe of any sort but it is not by sheer accident that in Cameroon for example more than 3/4s of those arrested and charged for fraud, corruption and mismanagement are francophones. One could make the case that if Anglophones had the same exposition to the power of the key and the purse under the same conditions, they would not have done any better. Yet this remains a mere hypothesis. One may need to question whether the problem is with the system or with the people or both. There is no gainsaying it that the success story of the Standard Bank of South Africa is inextricably bound up with the English culture that undergirds it.

What is more, The Standard Bank of South Africa has an impressive array of international connections. One reason why many people in the US will want to bank with Bank of America for example is undoubtedly its nationwide availability. In crisscrossing this country, Bank of America customers need not worry for they are sure to comfortably carry out transactions without fear of extra fees. Of its many strengths, one that stands out clearly is the Standard Bank of South Africa’s presence on four continents and 33 countries, 16 of which are in Africa. To have been able to survive in 16 African countries is undoubtedly a great feat within the characteristic ambient of the choking high-handed bureaucracy and disenabling banking culture. In this age of networking and globalization, such opportunities are golden.

In seeking to discover the secret to the success story of this financial juggernaut, I found the answer in its sustainable development program. First in its fourfold customer education initiative encompassing the following:

–         Winning Teams program – a school-based program that integrates practical banking formation into the school’s formal curriculum geared at empowering students with life skills in money management, banking, entrepreneurship and the economy.

–         Financial literacy campaign for high schoolers which equips young people with knowledge and skills to manage their personal finances

–         Teach a child to save which focuses on children in Grades 4 – 7 schooling them in the ABCs and importance of saving

–         Financial literacy Outreach that targets the wider community and is doubly pronged with one arm focusing on personal banking whereby people receive training in the rudiments of banking and saving and then the business scheme which targets businessmen training them in business management and even has an investment portfolio that provides loans to these trainees.

Any institution that invests in people especially young people is pitching its tent on solid foundation. This is always a win-win situation. I imagined what the multiplier effect would have been like, if a bank like Amity bank had invested in consumer education especially among the budding and burgeoning youth. I do not want to pretend that some of us are such a financial disaster because we did not benefit from such training. Yet it will also be highly disingenuous to discount the ripple effect such an education brings to the society. Engaging young people into such training is an investment yielding enormous dividends.

As kids in primary school, we learnt to keep small wooden boxes or tins where we saved our coins in preparation for 11 February and 20 May celebrations when we could buy some delicacies such as bread and sardine, with some long sugarcane and feed on the pepperish-skinned beef popularly known as kanda. During the long holidays, streets in Cameroon boom with holidaymakers all struggling to eke a living. If one of those banks could tap into these skills and build a banking culture into these at such tender ages, fiscal responsibility would become a stronger asset of the community.

In most boarding schools, parents leave their children with pocket-money. My parents often left me for example with 25.000fcfa every term while I was in Sacred heart College but paradoxically even before the term went halfway, I was already indebted to a number of other students. With hindsight now, I imagine that if a bank had put a savings’ scheme for students like us and drilled us in the importance of savings, we would have benefitted a great deal not just in terms of the accrual but more in terms of the habit for as they say old habits die hard. If only banks could launch such a customer education program from primary school to university level, there would be a better banking culture which will invariably spur development.

One may argue that people do not fail to bank because they do not want to but rather because they lack the financial liquidity. Hence it is akin to putting the cart before the horse. I agree but I think the greater point is that if one cannot be faithful in little things, it will be hard to become adroit overnight with managing greater things.

Two other areas where the Standard Bank of South Africa has left its imprint are with housing and agriculture two of man’s basic needs –shelter and food.

In its housing scheme for example, the bank provides not only finances but also expertise for decent and environmentally friendly homes. The bank has collaborated with different city administrations to provide affordable housing. The city provides the land needed for affordable housing while the bank provides the financing and the expertise.

For those in the Diaspora this is surely a solution to the nightmare of trying to build a home while out of the country. A friend of mine recounted to me how he spent over $30.000 to construct a home. His cousin was project director and was on an agreed salary just to “insure” a plain execution of the project. When he went home one year after engaging the project, he almost collapsed when he saw what $30.000 had succeeded to put up. It would need another similar amount to complete it. I imagine that if he had taken out a loan for example with the bank and then left the project to come to life through the bank he sure would have had a run for his money. The Standard Bank of South Africa provides such an opportunity.

The Standard bank of South Africa also has a housing loan scheme with credit facilities that cut across the economic strata. Low-income earners have the opportunity to “access finance to buy, build or renovate a home”

Agriculture is the mainstay of most African economies. Food shortages in 2008 ignited one of the worst demonstrations in modern history. The Standard bank of South Africa has understood clearly that global food security is a top priority in development and Africa can and in fact, should play a central role in guaranteeing this. Aside from providing funding solutions to small-scale farmers making “finance and direct inputs such as seeds and fertilizers more accessible”, one cannot fail to mention the bank’s engagement with the Alliance for a green revolution in Africa (AGRA) founded in 2006 with former UN Secretary General Kofi Annan as Board Chairman. Through this initiative and the Bank’s expansive network, new agricultural markets unquestionably emerge.

The overarching conclusion one comes to then is that the Standard bank of South Africa is a great force in sustainable development. How has the Union bank in Bamenda for example helped in the sustainable development of its locus operandi? Can the inhabitants of this locus claim a change in their modus vivendi because of the modus operandi of this financial institution? It is in this almost insignificant appendix to the work and mission of the Standard Bank of South Africa that I believe it deserves our accolades and we highly recommend it for a much more robust presence on the continent.

The Standard Bank of South Africa: A Paradigm for Sustainable Development. By Lambert Mbom

Of the many booths, I did not visit during the Aid and International Development Forum last July 2010, the Standard Bank of South Africa was unfortunately one. Given my initial attraction to this event namely to meet potential employers and make a pitch or better still to discover the topography of International development, in my wild dreams, this booth was then a wild cat. With no qualifications to serve even as a security guard at a bank, this was no match for me. What would a “broke” man like me be doing at a bank anyways?

Quite frankly, though there is no minimizing of the fact that my antipathy towards this booth was upped by the rather shocking fact that it was manned by some black folks. Come to think of it, we blacks have been greatly jaundiced. We seem to enjoy a bad press, if I may be colloquial here, especially in managing banks and financial institutions. Think about the many scamming schemes hatched and executed from motherland, or now commonplace money-doubling business to name but a few. They are nothing to compare with money laundering and other financial white collar crimes that are rife in our world. Yet, if you are like me, you would also have wondered whether these were not just a bunch of scammers, some con men with sweet as honey tongues to lure the unsuspecting.

My hesitancy was also greatly fuelled by the fact that I imagined the target audience for this bank was more for donors and aid agencies in need of a standard bank even if not chartered to vouchsafe the financial sustainability of their agenda. Prejudice got the best of me and I missed savoring an African pudding.

My search for “Africanness” in the development game after the Aid and International development forum brought me to this 148 years old banking institution – The Standard bank of South Africa. I was quite enthralled reading its rich history.

For all my thirty-some years in Africa, I never had the pleasure of banking. My dad surrendered to me a Post Office Savings’ Account he had opened for me while I was young. I cannot remember how much was in it but know I did not try to grow it; a decision I have never regretted for before long this savings scheme collapsed. This is just the fate of many such institutions which rise today and fall the next day.

As a matter of fact, the few times I visited a bank was with my beloved mum to pick up her salary which was to serve for groceries as we would matter-of-factly then go ahead to the market. Regrettably, I enjoyed the safari tours to the bank but failed to draw the lesson she meant to impress on me. By the way, I have never understood why she moved from the Treasury to BICIC then SCB – Credit Lyonnais and I think wound up with National Financial Credit. This is surely not unconnected to the familiar poor customer service wont of some of these institutions. Those French acronyms should also have something to do with it. This is only my poor guess. Sad enough, it has been a labyrinthine journey just to be able to get the paltry sum given to teachers as salary. 

As I grew older, I remember the few times I went to the bank was to visit friends and either beg or borrow or expressed more politely, curry for some favors. These favors were not from the bank but from my friends working there. After all, if they keep all that money, they too cannot but be cognately “moneyee” or in some jargon “casheous”.  As to whether I ever repaid them what I borrowed, that is a topic for another session and your guess is as good as mine. Then Christmas of 2003 gave me an opportunity as I went in to the Western Union to cash a gift a priest friend of mine had sent to me. You can imagine the airs I put on and the majestic way I strolled out of that bank with everybody around me being suspect. The whole world seemed to be rotating around me with the meager 250.000fcfa I had bagged.

My first real bank transaction was in the US where I had the privilege of a checking account and a savings account. I was also able by some stroke of luck to land a credit card two years later which I soon maxed out, got burnt out and today credit now is niet. Clearly, excitement got the better half of me and it sure will take me a long time for me to bounce back. Credit without proper education in personal financial management is a recipe for disaster. The disastrous effect of this is felt when one needs to rent an apartment, buy a house, buy a car etc then the hydra-headed monster of credit score rears its ugly head.

One thing which is clear is the fact that my story is not an exceptional fairytale. The banking culture in many African countries is no different. I cannot help but recount the story of the famous Nigerian comedian – Chief Zebrudaya whose wife bugged him for a new mattress so much so that one day he decided to treat her to a pleasant surprise. He discarded the old mattress and put it to flames and replaced it with a more comfortable sleep-luring one. When Ophelia, Chief Zebrudaya’s wife, came home, the husband was all smiles and broke the good news to her. Instead of celebrating, Ophelia was restless and frantically searched around for the discarded mattress. When she was told that this had been burnt, she almost collapsed as she recounted that she had hidden her life’s savings in this mattress.

The pipe smoking old man who got up in the morning to discover that the paper he had rolled for his tobacco and piped off was his lone two thousand fcfa bill. This surely strikes a familiar chord.

There is no denying it that banking in Cameroon is reserved for the few rich barons especially business gurus. Most civil servants also receive their salaries through banks. Banking itself became a vibrant “business” in the insatiable “bush-falling” industry as “dokimen” eked a living from “waxing” bank statements for unsuspecting clientele to take to the embassy. When embassies started calling banks to verify the bank statements, some bank managers made a big scoop as they welcomed many in desperate demand for these statements.

The history of banking in Cameroon is a sad tale. The recent Ponzi scheme in Kumba that hit the news waves last year where a coterie of Nigerian con men duped Cameroonians in Kumba to a luscious savings scheme with windfall profits. Many fell in to the deal and soon and very soon in deed K-town and its notorious feymania had been beaten in its own game on home turf as the entire  town was reeling.

In the wake of the post financial meltdown, fueled in large part by the banking sector, increasingly the argument is being made every day in the US that banks should be able to lend to small business entrepreneurs so they can grow their businesses and a fortiori the economy. It is a key, in fact, a master-key in growing jobs in America. Yet we cannot forget the sad truth that the sub-prime mortgage scandal where many people got approved for mortgages they could not afford led the banks to the cataclysmic meltdown. And talking about mortgages, there is an interesting pattern amongst immigrants who have not learnt to cut their coats not according to their sizes but according to their cloths. High foreclosure rates are the sad repercussions. Sadly, this is not a new phenomenon.

Southern Cameroonians revel and regale in stories about Cameroon Bank – a typically Anglo-Saxon bank that thrived before the coming of the francophone. One major cause for bank failures is undoubtedly poor management of the loan scheme. Loans given to a government run by a gang akin to the legendary Ali Baba and the forty thieves or to people not because they are credit-worthy but because of their status in society, or because they know people who know people. Risky loans saw the demise of this financial juggernaut Cameroon Bank and today Southern Cameroonians can only hanker after the fleshpots of the past.

In our time came Amity bank born amidst great promise and fanfare. It sailed tall for a while and then bedeviled by the personality feuds between Tasha and “smooth criminal” Bongam among others, it fell from glory. Today, it is a mere shadow of itself.

There is no doubt that one of the major drawbacks to formal banking in Cameroon is  the popular “njangi” – the most basic form of which is the pooling together of people who together agree on a fixed amount to contribute in a given time frame with monthly being most common and on the basis of a random system mostly balloting, one person is given the contributions of the other.

If there is any classical example of the truth that history repeats itself it is the recent instance in DC of a group of unsuspecting economic brokers who got together for a njangi with the famous Bongam, or notorious maybe. He is said to have flooded the list with his own names unknown to the others, most of which by some rather intriguing mafia came up early so much so that after the others had contributed month after month and given to him when it came to his turn to contribute he began defaulting. Then the lid was taken off the pot much to the chagrin of the others who realized they had just fallen into a scam. I hear some people lost as much as $16.000. Wonders shall never end.

A formal form of this “njangi” is with the popular credit union. They have left their marks in serving especially rural communities. Proof of their success story is the creation of the credit union bank called Union Bank. One rightly wonders whether other retail banks can stand the finesse of these credit unions which are more credit accessible, have record low-interest rates on loans and more people friendly.

It is against this backdrop that the story of the Standard bank of South Africa stirred my sixth sense. I am no expert in financial matters but still reserve the privilege to be able to showcase a good financial institution such as the Standard Bank of South Africa. Among the many things that fascinated me about this bank, the most distinctive was its sustainable development portfolio. It is a compelling blueprint and quite transformational.

(To be continued)

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