Sharp Strategies, Remote Locations Drive Mutual Alliance
Mortgage
By Dan Ede
Success in business is all about studying the market very well and positioning oneself in a segment of the market where one has core competence. That is what Mutual Alliance Savings and Loans Limited, a Primary Mortgage Institution, has been doing; and it works marvels for the mortgage banker.
Speaking in an interview with THISDAY in his Uyo, Akwa Ibom state, corporate head office, last week, Mr. Callistus Ugwumba, the bank's Managing Director, said his strategy was to locate his bank's branches in areas where he would not be struggling for accounts with commercial banks. He, therefore, could not see anything wrong in operating from Uyo, which some people feel is too peripheral to host a bank's head office.
"My strategy is not only to locate in big towns about banking; it is to locate in areas where I don't really have to struggle for accounts with commercial banks. I'm not a commercial banker; I'm a mortgage banker. I'm doing something unique now in Ikot Ekpene because I located in the centre of the market where there is no ( other) bank. I'm doing something unique now in Oron; I'm locating where there is no bank, except First Bank", he disclosed, adding that he was contented with having his bank's branches in the big cities such as Abuja and Lagos.
He further explained: "The unique thing is, locating where you can mop (up) funds -where funds are in excess, where the new generation banks cannot locate; and use the fund to do business. That is why it is unique. Most of the areas where I'm locating now, commercial banks cannot locate there because operational cost will kill them".
The youthful chief executive officer also disclosed that he was extending the bank's branch network to Ugep in Cross River State and Aba, in Abia State.
Talking about the market potentials of Ugep, he said: "If you go round the whole area, several kilometres away, you will never see any bank except First Bank. And you know, First Bank doesn't market. The market is inexhaustible in those areas".
Incidentally, it is not only in its choice of locations that Mutual Alliance is doing unique things. It equally does so in its product designs. Most of its products are tailored to the needs of the people who are not usually taken into consideration by the top-flying banks. A typical example is 'Traders' Paradise Account'.
This product, according to Mr. Ugwumba, "is just meant to alleviate the sufferings of some of the traders around who don't have the financial strength to do business -to strengthen them; to make them expand and so on", he said, adding that he loved the product so much. "My joy is always made the day I assist a trader who has a shop to expand and get another shop somewhere", he asserted.
The modality: "What we say there is, if you have 40 per cent of the money you need in your account, we make it up for you with a loan for the remaining 60 per cent", he explained.
This, THISDAY gathered, is a soft loan that attracts about 28 per cent interest rate; and spread over many years.
Over how many years precisely?, you may wish to ask. "It is a function of the cash flow of the customer. We do it according to your cash flow. If your cash flow is not high enough, we have to tailor it to meet that purpose", Ugwumba said.
The other interesting product on the stable of the bank is the one it calls 'Home Ownership Scheme'. "The scheme says, 'if you are a customer of the bank and you make lodgments into your account; and you have up to 20 per cent (of the cost) of your dream home, we help you provide 80 per cent of it and spread it over a period of time for you. The interest rate is very minimal. What we do is that we take an average of the rate at which you are saving and our lending rate. So, you find out that the rate will drop automatically", he told THISDAY.
At the moment, the bank is accessing N44 million from the National Housing Fund (NHF) for its customers in Abuja. "You can also enjoy the services which we give through the NHF.... And how it goes is this way: if you are a contributor to the NHF -if you are not a contributor, we can help you to register. Provided you can demonstrate financial strength and you are gainfully employed, we can look at how we can package NHF for you, help you to access; and disburse to you and monitor so that you can repay us and we pay back (into) the NHF. And you know the interest rate is 6 per cent, spread over a maximum period of 30 years", he said, adding that they have done it successfully for one or two customers.
The bank has also gone into a consortium with a South African consulting firm, Kwazon, which is now developing 200 units of 2-bedroom semi-detached and 3-bedroom flats in Aka-Itam, Akwa Ibom State. The project is valued at N900 million.
The bank, though a new one, delivers a full range of banking services through its numerous products. "Because of the network we have, we also do fund transfer from any of our branches. we also do cash pick up for traders, churches and schools which don't have the time to go to the bank. We make arrangement where they can on daily basis go to pick up their cash", Ugwumba added.
Mutual Alliance Savings and Loans Limited was licensed under Decree 59 of 1989 as Quality Homes Savings and Loans Limited.
However, in March 2001, the bank went through a restructuring process and got approval for a name -Mutual Alliance -a new board and a new management structure.
With a current paid up share capital of N105 million (N5 million above the statutory required minimum) the bank is already eyeing N500 million capital base, which has become the in-thing in the industry.
One thing that goes for the PMI is that its crop of board members and even management team are made of up of young, experienced and visionary people who have distinguished themselves in their various fields of endeavour.
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