Alain Law Min
Acting Chief Executive of The Mauritius Commercial Bank Ltd.
“We think organic growth is the best, and working with partner banks we can continue to grow our revenue base by developing good relationships and strong partnerships. We have representative offices in Africa; we are currently looking at opening in Dubai or Singapore to round the Indian Ocean.”
FDI Spotlight: In 2016 Bank of China was the only bank that was awarded a license to operate in Mauritius. What is your opinion on their entrance and to other regional and international banks who are looking at Mauritius as a platform for investment into Africa?
Alain Law Min: I think awarding Bank of China the full license is very important. It is one of the big Chinese banks and it conveys a sense of credibility. And that credibility is important for Mauritius as it looks to build itself as a regional international financial centre. Plus, as we all know, Chinese imports of commodities from African countries are very large and ongoing. Chinese investment and infrastructure projects in Africa is enormous, which is the trade-off for the purchase of commodities.
However, China and Africa are quite far away from each other; as the volume of trade commodity linked to trade finance business grows and as the volume of their investment and infrastructure grows, they need to have somewhere closer to manage their portfolio investments. There are three potential locations for this management centre: Johannesburg, Nairobi and Mauritius. Not all countries and cities in between Africa and China are capable of handling the investments, but Mauritius certainly is.
As the largest commercial bank in Mauritius, what are you doing to capitalize on mainland Africa’s business opportunities?
Alain Law Min: We are doing a number of things. In the corporate arena we have always had a strong bank-for-bank strategy. We are working very closely with the top 10 banks in all 25–30 sub Saharan African countries. These relationships take time to build up, and every year we have a seminar called Africa Forward Together where we invite 40–50 senior bankers from their institutions in these countries. We believe quite strongly that from good relationships come good quality business, and we want to partner with these banks as they look to assist the development of their own economies.
What can Mauritius do to ensure that capital raising can be done through the island?
Alain Law Min: With technology and communication improving, I think a third submarine cable will be added which will improve internet capacity here in Mauritius. Fund raising for African companies can be done in Mauritius. MCB has done quite a bit in the private equity sphere, but there is no reason why Dollar bonds or listed equity raising cannot be done here.
The total amount of money that has been invested in India, Africa and China that is managed through this global business platform that we have here in Mauritius is over US$600 billion. That demonstrates that overseas fund managers are quite knowledgeable and that they understand the legal, accounting setup here. There is no reason that this can’t be further developed.
In terms of technology and software innovation, what is MCB doing to upgrade its mobile banking platform?
Alain Law Min: Three years ago we launched our own mobile app called MCB Juice, we currently have around 100,000 subscribers and more people are actively using the Juice platform. Besides checking their banking accounts, people are seeing that you can do even more with it: you can pay your utility bills, buy pre-paid mobile airtime, withdraw money at ATM without any card, and transfer money through mobile phone numbers. We recently linked up with PayPal and Visa to send and receive money from abroad, and are regularly adding more features. This is all on top of all the other standard offerings we have.
What is MCB’s approach to human capacity building and professional development?
Alain Law Min: We believe very strongly in training and we support individuals that want to pursue their studies or something along those lines. There is also a bank wide training at the moment which aims at raising the bar on customer service and leadership. If you look at other very successful companies, they all have a very serious attitude towards training. We have the reputation as being the best bank across many areas, and that is a reputation we would like to keep.
How are your collaborations with universities to develop banking and financial services oriented programmes?
Alain Law Min: We have interns in every year. We also partnered with the University of Stellenbosch in South Africa for what we call a management development programme. This year is the second year, and it will be ongoing and there are about 40 people involved. Stellenbosch University sends tutors here and they work on subjects defined by the bank, so there is no disconnect between the business and what people are studying. What they are taught covers a whole lot of themes, including mobile banking, new technology, international marketing, etc.
We also developed a unique training programme called DUO, in collaboration with the Mauritius Chamber of Commerce Business School. DUO is designed for people aspiring to work in the financial industry and blends formal training with practical work experience at the MCB. During the two-year programme, the student acquires knowledge in banking and an understanding of the economic, legal and fiscal concepts.
Upon successful completion of the programme, the student is awarded a Brevet de Technicien Superieur – Banque, a higher national diploma of French education and is eligible for employment at the MCB.
What is the future of MCB in Mauritius and the rest of the continent?
Alain Law Min: We are a bank that clearly has a strong market share in Mauritius, and therefore to grow at a rate faster than GDP growth – which the real rate of growth here is 3.5%-, we need to look at markets outside Mauritius.
The GDP of the Eastern African seaboard or other parts of the Indian Ocean is much larger, so there are big opportunities for us. We have representative offices in Kenya and South Africa and are currently looking at opening in Dubai or Singapore to round the Indian Ocean. For example, to tackle the Sri Lankan market which has a bustling tourism industry, that is congruent with everything we have done with Mauritius’ tourism industry.
In this regard, we think there are good reasons why customers should have a bank account in Mauritius. Mauritius is a member of all the important treaties, tax treaties, investor protection and promotion agreements, plus all these trade groups like SADC, COMESA, the Indian Ocean Rim, and the East African Community. Mauritius as a country, is a member, so that gives MCB good respectability.
We think organic growth is the best, and working with partner banks we can continue to grow our revenue base by developing good relationships and strong partnerships.
We have a ‘Bank of Banks’ value proposition for banks in Africa. MCB aims to position itself as a regional hub for handling trade finance, card operations outsourcing and consulting services linked to project management and high-end IT solutions on behalf of MCB’s financial and banking counterparts. In the context of this initiative, MCB decided to leverage its market presence, expertise, infrastructure and network of over 1,600 correspondent banks worldwide and target ‘middle-tiered’ banks. Emphasis is being placed on banking groups which have a wide network in, and a primary focus on Africa. This strategy has enabled MCB to extend its footprint into previously untapped markets and since 2008, the bank has serviced over 100 financial institutions covering more than 30 countries in Africa and the region.
These banks benefit from the same industry capabilities, market insight and state-of the-art technology which MCB provides to its own clients but bundled in a spirit of business reciprocity for these banks’ specific needs, objectives and technical requirements.
Why choose Mauritius as a global investment platform?
Alain Law Min: Mauritius has established itself as a very interesting and trustworthy jurisdiction which is well regulated and can act as a gateway for trade and investment between the developed world, Asia and Africa. The country is on the whitelist of the OECD; it is investment graded, with a rating of BAA1; it is an open economy and there are no foreign exchange controls; it has a reliable infrastructure; and it has a bilingual, educated labour force.
Mauritius has the opportunity to act as a regional financial centre for Africa and fulfil the need for a well-located, politically-stabled, well-regulated, with a good legal system, platform for regional treasury and regional management of investments in African countries.