Access Interview: Dr. Bernd Zattler, Chief Executive Officer of AccessHolding
By Ivana Mitrovic
Dr. Bernd Zattler is the Chief Executive Officer of AccessHolding. He also serves as a member and chairman of some of the holding’s investees. In 1994, Dr. Zattler established the consulting firm LFS Advisory GmbH (formerly known as LFS Financial Systems), the founding shareholder of AccessHolding. His prior professional experience includes work for a multinational firm and other institutions engaged in development finance. Mr. Zattler holds a PhD in Economics.
(…) many things we did during the hot phase of the crisis will be preserved and become part of our ‘new normal’, in particular of course, the interaction between us and with clients using new channels.
In AccessHolding we believe that the financial inclusion and provision of responsible banking services is a key ingredient of sustainable economic growth and we are dedicated to our vision since 2006. What would you consider the most important milestones during this 14-year long period?
We set up AccessHolding in 2006. Until 2015 we had established one of the largest microfinance networks globally with ten financial institutions on three continents. The network was growing and generated a decent profit for shareholders.
Then, in 2015, the AccessGroup entered a phase of many challenges. Several banks suffered significantly from economic shocks stemming from falling commodity prices, oil and copper in particular. As a consequence, we had to withdraw from our largest network Bank in Azerbaijan. In Nigeria and Zambia, our banks had to cope with a strong devaluation of the local currency and unavailability of foreign currency on the market. But the “commodity price crisis” was not the only challenge. Other important developments, which had started earlier and gained momentum at that time were: the questioning of microfinance as a development tool, increasing competition on local markets and the digitalization of financial services which required very substantial investments.
The years 2018 to 2020 were characterized by comprehensive measures taken to make AccessGroup successful under these new conditions. Key areas were the merger with LFS, accelerated digitalization, focus on efficiency and the review of our corporate strategy. As a result, the group returned to profitability and growth in 2019.
Recently, AccessHolding announced its new strategy. What will be the direction the group is headed to now?
The two most important strategic directions refer to our investment policy and the role of the holding.
We have decided to regularly review our investment portfolio in order to decide whether we want to grow a respective network institution, maintain it or exit from it (in parts or completely). In addition, we continue to look for acquisitions. This approach has been labelled GAME (Grow, Acquire, Maintain, Exit). This is a more active approach to our portfolio management compared to the first ten years of AccessHolding’s history where we focussed on growth and considered exits only in exceptional circumstances.
The second important strategic change refers to the role and services of the holding. What we see is that our network of banks is becoming increasingly heterogeneous. While some banks grow and strengthen their institutional capacity (most prominently Credo, AB Madagascar, AB Nigeria and AB Zambia) others face substantial economic or systemic challenges and therefore require more holding support (AB Tanzania, AB Rwanda and AB Liberia). This heterogeneity makes it difficult to develop all banks with one-size-fits-all solutions. Therefore, the holding will follow an individual approach that is tailored to the needs of each network bank and supports it to become more independent.
Can you tell us more about AccessHolding, as an impact-oriented company who actively contributes to the UN Sustainable Development Goals?
The contribution of AccessHolding and our network banks is not limited to corporate social responsibility programs. Our purpose is to offer meaningful financial services to small business owners which help them generate income and improve the lives of family members and staff. With our work we help towards the achievement of the UN Sustainable Development Goals, in particular to the improvement of livelihoods (Goal 1: no poverty), to sustainable agriculture (Goal 2: no hunger), to the empowerment of women (Goal 5: gender equality), to the growth of businesses (Goal 8: decent work and economic growth) and to financial inclusion (Goal 10: reduced inequalities).
Earlier this year AccessHolding joined the Microfinance Coalition and recently you have participated as panellist in a COVID-19 mitigation webinar, organized by the IFC SME Finance Forum, along with other participants from the largest microfinance networks. Can you tell us more about the coalition, reasons for joining and impact expected in the future?
As often said, the corona pandemic is unprecedented and has a huge and long lasting impact on our lives and the way we do business. We joined the Microfinance Coalition for two reasons.
Firstly, as there are no textbooks for banks on “how to deal with a pandemic” we see the Coalition as a good platform to share experience. Therefore, I participated in the webinar that you mentioned and we shared our Covid19-Information-Bulletins and other useful information with the Coalition partners.
Secondly, as the Coalition represents a very broad range of MFIs and institutions focusing on financial inclusion, it is in a very good position to promote the interests of the industry, for example, in discussions with development finance and refinancing institutions. The first results are promising: awareness is rising that MFIs are essential to reach those vulnerable people who are particularly affected by the crisis.
What have been the main challenges for you this year that you managed to overcome and respectively, which learnings have you gained from the process?
I feel somehow privileged in the corona crisis. I have a strong belief that things get better and that problems can be resolved (although in reality, of course, both are not always the case). For me personally, the lockdown period was a good time. We moved out of the city to live with a friendly family in a shared house together with all the kids. The adults worked a lot, every evening somebody was responsible for the dinner, we did a lot of sports… it was a very interesting new experience, like four months of new life in the old one.
The corona crises showed me and others that we are able to change. I hope that this experience helps us to make other changes that make our world more resilient e.g. to fight global warming, to better distribute wealth globally and in our communities, and to use less resources.
With regards to the AccessGroup, I think that the banks and the holding did quite well in the crisis so far. The final results can only be seen in a few months when we know, for example, which share of the restructured loan portfolio performs. At AccessHolding, the home office experience was positive. I also see that many things we did during the hot phase of the crisis will be preserved and become part of our ‘new normal’, in particular of course, the interaction between us and with clients using new channels.
A big thank you to all staff and partners of the AccessGroup for their flexibility since the outbreak of the pandemic and their trust that together we will master the problems and come out of the crisis even stronger!