CEO & Executive Director (AFRASIABANK)

Mauritius is currently going through a phase of transformation from a middle income to a high income country. How do you think this moment has to be managed in order to keep growing?

The country needs to continue to open up, even more than it has so far. The growth area is going to be Africa, for institutions like us, Eastern Africa, as it becomes a very integrated trading block like Asia did 20 years ago. However, Mauritius is just 1.3 million people, so we need to find a way to be really strategic in what we are doing. Secondly, we must try for Mauritians to come back from overseas and thirdly, we have to open up our opportunities to external players. The country needs to build up its capacity one way or another; otherwise this development will not happen.

We are trying a lot of things and not all of them can be done quickly enough to make us relevant to our trading partners, so our choices are to focus on strategic moves and opening up.

The plan of the government is to transform Mauritius into a business hub; taking advantage of the role the country plays as a bridge to enter the African continent. Why does it make sense for an investor to enter the African market via Mauritius?

We have a lot of preferential access to the port, transshipments and duty free access through COMESA and SADEC. We also have tax exchange agreements and investor protection agreements so this takes the friction costs away. This is why many companies are setting up in Mauritius; South African, Kenyan companies are establishing here and bringing more people to service from here. You get the asset that Mauritius has a great equity, no exchange control, stability, etc.  This is why Mauritius is becoming sort of the head office for treasury for South African businesses

The financial crisis extended its effects to worldwide economies. In the case of Mauritius, being the financial sector one of the most representatives, what were the main challenges you had and how did you face them?

The challenge was that no one knew how long or deep it would be. In the tourism sector the impact has been deeper and longer than expected, the industry took a little time to re-orientate away the Indian nation to rise again, which is what it is now doing but you also have to think on getting airline access, marketing, etc…

It took us a little time to understand the global crisis was severe. That said, the African opportunity has continued. Africa remains quite active in many ways; not just about energy and commodities. There are still a lot of things going on; telecom, consumer goods. Mauritius is now re-orientating its efforts regarding global trends, focusing its services away from India and really opening up to where the growth is going to be.

AFRASIABANK is now not only one of the strongest institution but a benchmark in the industry. How has been the evolution of the bank in Mauritius since it started operating?

We are accustomed built to be a specialist between Asia and Africa but also the whole world. By recognizing the fact that self-sale trade remains still a very dynamic component. We see this for example with China investing out 22 hundred billions USD in Africa versus 20 billion 10 years ago, and we are setting in the middle of that flow.

I’ve been working in Asia for many years in HSBC so I saw the whole Southeast Asian miracle happen and I got the feeling that all the changes were coming towards here, so I came back 7 years ago to kind of sponsor shareholders and become a founding shareholder and executive officer of the bank, so as I said, we are accustomed build to capitalized the growth that is happening in this region although it wasn’t always that obvious

As the financial sector in Mauritius gets stronger and positions itself under the international spotlight, opportunities increase but so does the competition.  How do you present AFRASIABANK “Bank different” to new clients to be the Bank of their choice? What is the main asset you would like to be recognized for?

Competition has two aspects, one is the scale issue which is something Mauritius still needs to address; The more banks are here and the more capital is based in Mauritius more businesses are going on and this is a good thing because it is putting us in the map. For the moment we have 21 banks which is a far rate from what you find in Dubai, Hong Kong or Singapore and we are not there yet, so the more players here is better for all of us.

On the other side, we are African originated; an African shareholder specialist and our stakeholder are committed to be an African oriented bank. This makes a difference because sometimes people can set up operations in one place but if they are based far away they don’t get the same customization or risk taking capacity.

So, more competition gives us a bigger international awareness but those who are really expert here on the ground, we still have our competitive advantage. This is a very challenging market so you really need to know it and know how to perform on it.

The European crisis was a determinant factor that forced to look for new markets and brought new trends. Where are you currently focusing your efforts to diversify your markets? Are you currently looking to attract investment/clients from North America?

We think South Africa has great technical and managerial skills and now South African companies are expanding across the continent, and we have almost 30 people in South Africa on our investment bank. For us Mauritius and South Africa are a good combination in terms of capital and expertise and there is a lot we can do in south eastern Africa.

We have made some investment in Zimbabwe because that is an emerging turnaround story and we are looking for other countries in the region to set up boutique operations as well, allowing us to expand our operations in new markets with some investment and credit funds. We will continue doing some significant investments in the region as specialized vehicles to do business.

We have clients from North America especially in the alternative advantage areas, whether is solar power or bio tech energy. A lot of them come from California. We got a lot of the existing private equity; America historically invested in India but now they are investing in Africa as well. As they start to have a bigger presence in the African continent we are increasing our Northern American client base.

In Mauritius, you operate under a partnership approach scheme and currently have 3 major strategic shareholders (GML, Intrasia capital & Proparco). What are your criteria when looking for partnerships? Are you currently working on attracting new major shareholders?

Those are shareholder investors, institutions who have an appetite for investing in Africa with a bank like ours; they are strategically aligned to us. We don’t want to have 20 shareholders of 5% because they probably wouldn’t have the same strategic perspective that we need to bring as a smaller niche bank.

We had the chance to interview Mr. Arnaud Lagesse, who remarked the importance of diversification and continuous innovation. You recently pioneered on a new market with the Retirement plan. What other new services or concepts can our readers expect from AFRASIABANK shortly?

We continue to grow our core landing activities across Africa so anyone wanting a bank to lend for their mining or technical projects will find us as a very active institution. Secondly,  we are looking to do some private equity investing in other financial institutions and also we are looking to set up some specialized investment funds which are going to be very interesting for investors all over the world wanting to have exposure in Africa, they will find in us a partner to take those opportunities for their investment portfolios.

AFRASIABANK has been awarded several times as the Best Local Bank in Mauritius and in 2013 it was elected the Best Bank in Southern Africa. What does it represent to you, to be leading an institution with such recognition? Where do you see the bank in 5 years?

I come from a big global banking environment so I am used to this. However trying to position AFRASIA as one of the best banks with the local touch is what we are trying to do, so having received these awards, being the bank so young, is something that has been great for all our team, having this kind of recognition puts a great spirit in all our members and also the clients. They always enjoy our good service but it is also nice to know it is a recognized bank. The awards don’t pay the bills but they do bring opportunities.

We will probably be 3-5 times our current size so we will be able to give access to credit to the biggest institutions and investors. I see us as one of the banks you must consider if you are doing business especially in South East Africa. We are not only here in Mauritius, we are in South Africa, Kenya, Zimbabwe and with our specialized funds people can do business in many other countries. Business men are looking to do business in Southeast Africa and we want to be their choice, one of the banks they have to speak to before making a decision

AFRASIABANK has been a key player in the financial structure of the country. However, in terms of CSR, what has been the contribution of the bank for Mauritius?

We have been supporting a number of projects. We specially look at projects for youth and disadvantage kids. You can’t have a prosper community if the youth is not getting opportunities, so we have done a lot of vocational and technical training. We are focusing a lot in education here in Mauritius and also in Cape Town.

Looking at your professional background we find a wide experience in this industry both local and international. From a more personal focus, when you look back at all these years, what do you feel most proud of?

I would say it is the fact of taking an idea, sticking to it and convincing a great team of people that they were doing the right thing by trusting us and joining our brand and business. It has been for me a great thing in leadership and marketing, creating a brand and a vision that our clients can see and to be able to track entrepreneurial people wanting to step out and create something different.

To conclude this interview Mr. Benoit, our readers are more interested on the leaders we interview than on the company or institution itself. In that context, what message would you like to send to our worldwide readers of HARVARD BUSINESS REVIEW?

Africa is transforming itself and I am convinced that people will see that happening each time more and more. How they engage with institutions and partners to do that is the important thing. Is not why you invest in Africa, is how; how do you do it, how do you manage the risk, how do you measure opportunities…  and this is something we do in AFRASIA with a team of people that know the markets and are able to put out solutions for that. We are a great way for people to take advantage of the opportunities.