Tolaram Group, an Asian family-run company, has indicated plans to introduce digital banking in its African market. Although the plans have not been finalized, Nigeria, Ghana, South Africa, and Egypt are likely candidates.
The group has gained a fortune worth over a billion dollars in the continent through its fast-moving consumer goods and real estate companies and seeks to leverage its strong presence in the region for its digital banking venture.
“We have access to thousands of distributors in these markets and that can also have a knock-on effect on our business,” a statement by Tolaram’s Mergers and Acquisitions Team-lead, Kunal Adnani, reads. Further commenting on the new move he said, “the more credit we can give them, the more they can increase volumes.”
This new entrance to the African market is not novel to the company as it owns a financial institution in Indonesia known as PT Bank Amar. Bank Amar is a digital institution that services customers with loans and deposits through mobile phones. Hence, Tolaram seeks further business expansion in the continent as it serves the financially excluded.
The Lagos Business School gave statistics that show 36 million Nigerian adults living without bank accounts while in Ghana, financial access across regions and demographics is still low, particularly for women, and poor and rural citizens. However, a World Bank economic analysis says Ghana can reach universal financial access across regions and key demographics using innovative technology. This is where Tolaram’s digital banking comes in handy.
The company’s digital banking concept was inspired by its paper-mill operations in tech-forward Estonia. In Kunal’s words, what the company is “looking to do is take the same technology, the same systems, and the same learning into African markets” where they have gained much presence on other products.
Tolaram’s proposed entry would be contending with digital banking giants like ALAT by WEMA Bank and Standard Chartered Bank plc in Africa. Also, the company would be competing with other traditional banks and fintech firms, a lot of which in recent times have introduced several digital banking channels and products to offer basic financial services to people.
Tolaram Group is an industrial conglomerate with a portfolio covering multiple sectors including fast-moving consumer goods, energy, real estate, textiles, and financial services. Headquartered in Singapore, it was founded in the 1940s as a textile company but entered Africa through real estate and consumer goods in the 1970s. The group is the manufacturer of the Indomie and Minimie noodles in Nigeria.