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Private equity fund backs Nigerian cash solutions provider

by LOLADE AKINMURELE & DAVID IBEMERE

September 13, 2017 | 3:30 am
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Private equity fund manager, Apis Partners, will back cash management solutions provider, Bankers Warehouse Plc, with an undisclosed amount, the emerging markets-focused fund manager said Tuesday.

Lagos-based Bankers Warehouse is the only local company with a license to process cash and one of five licensed to convey bank notes in armoured trucks from one point to another for clients, which range from financial institutions to corporates and the Central Bank of Nigeria (CBN) as deduced from its website.

The investment will be used to boost the company’s existing cash processing and cash-in-transit services, strengthen its capital structure, offer additional cash management solutions and grow its coverage.

“We see a significant opportunity to further leverage technology within cash logistics to increase convertibility of digital and physical cash, thereby augmenting user confidence and inclusion within the digital financial system,” said Matteo Stefanel, co-founder and managing partner at Apis. Stefanel declined to state the amount being invested.

Apis’ backing of Bankers Warehouse is the second such private equity deal in the Nigerian financial services sector in the past month, after Bob Diamond’s Atlas Mara raised $200 million to boost holdings in Union Bank of Nigeria Plc, aimed at helping the latter expand its markets, treasury and financial technology businesses, according to an official statement released at the time.

The investment in Bankers Warehouse demonstrates Apis’ commitment to reducing the cost of financial intermediation in its target markets, according to Rotimi Oyekanmi, a partner at Apis, which is present in five countries and has completed five investments to date.

“The company plays a critical role in Nigeria’s financial infrastructure and financial intermediation through its core cash management solutions and we look forward to supporting Bankers Warehouse as it improves the functioning of the country’s financial system by ensuring the integrity and availability of cash, as well as its efficient processing and digitisation,” Oyekanmi said.

The Apis deal is a breather for Bankers Warehouse which has struggled to raise capital since last year, according to vice chairman, Victor Hammond.

“The last 18 months securing bank credit for us was tough, we could not even raise foreign exchange to procure spare parts for our trucks, we had to cancel our contracts with about two banks,” Hammond said.

“This deal is a very big leap for us, as the investment which come in form of new equity will enable us support the growth of the company’s existing cash processing and cash-in-transit services, and broaden our national coverage.”

Bankers Warehouse is one of millions of Nigerian businesses bearing the pangs of a slowdown in economic activity, after lower oil output and acute dollar shortages tipped Africa’s largest oil producer into its first recession in a quarter of a century.

Nigeria may not be entirely out of the doldrums, but the economy expanded 0.55 percent in the second quarter of 2017 for the first time in six quarters, helped by improved oil output.

As the economy turns the corner and dollar liquidity improves, the financial services sector is cranking back to life and has posted two straight quarters of growth this year, since contracting by 5.5 percent in 2016, according to data compiled by BusinessDay and sourced from the National Bureau of Statistics (NBS).

Amid the economic downturn, credit to the private sector has slumped to a near six-year low, as government borrowing crowds out private sector lending, jacking up the cost of capital for businesses.

With offices in London and Lagos, Apis invests in financial services companies in Africa and Asia.

The firm’s website lists five other investments, ranging from health insurance to an Indian company that manages ATMs.

Bankers Warehouse is present in 40 locations across 28 of Nigeria’s 36 states and the Federal Capital territory.

 

LOLADE AKINMURELE & DAVID IBEMERE


by LOLADE AKINMURELE & DAVID IBEMERE

September 13, 2017 | 3:30 am
12893  |   93   |   0  |   Start Conversation

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