The transformation of Sinapi Aba Trust into a deposit-taking financial institution was a pivotal moment in its history. Due to the financial institution’s extensive footprint across Ghana– reaching all ten regions and over 130,000 clients– the process required substantial changes to the organization’s business model and culture. This transition is the focus of the MicroLead project established in partnership between UNCDF, Sinapi Aba, and Opportunity International, and provides a myriad of lessons to draw upon.

Sinapi Aba, a financial service provider in Ghana, was founded in 1994. Sinapi Aba became one of Ghana’s top microloan providers within its first decade, and remains the country’s leading poverty-focused financial institution in terms of borrowers (over 50% of its clients are illiterate). The institution is also an active member of the Opportunity network. 

Sinapi Aba received its savings license from the Bank of Ghana in March 2013. Within two years of receiving the license, Sinapi Aba has already opened more than 175,000 voluntary deposit accounts and has reached a deposit portfolio of USD 10.6 million. To help achieve these results, a team of Opportunity International experts have provided Sinapi Aba with technical support in the areas of risk, IT, financial projections and modeling under the MicroLead project. The project also includes a multi-year research study spearheaded by Opportunity to capture Sinapi Aba’s transition to a deposit-taking institution.

The MicroLead project has supported a number of key operational changes required for Sinapi Aba’s launch of savings services, including developing seven savings products, upgrading the core banking platform, introducing biometric fingerprint scanning, and enhancing 20 of Sinapi Aba’s branches to meet Central Bank requirements. The culture of Sinapi Aba has also changed alongside operations through modifications to staff incentive schemes and the introduction of new goals through staff training programmes. These improvements and others have produced the following lessons and observations:

• Sinapi Aba staff demonstrated a strong commitment to the transformation by adjusting to new roles and spending long working hours to make the transition successful.
• Staff transfers, role assignments and additional task allocation had to be packaged properly with incentives to ensure staff acceptance and maximum cooperation.
• With proper support, staff transitioned quickly to adjust to the changing orientation from a credit approach to a full financial intermediary approach.
• The cultural shift was felt by every staff member, and the integration process between old and new staff members proved challenging.
• Because the Central Bank required substantial changes to operational and internal controls, some of Sinapi Aba’s clients could not be retained, including those who could not meet the new loan documentation requirements.
• The level of new competition that SASL now faces from Savings and Loans and Commercial Banks on the savings side has become a major focus for the organization from both an operations and marketing perspective.
• The transformation into a Savings and Loans entity has been more costly than anticipated (with the devaluation[1] of the Ghana Cedis currency loosing nearly half of its value compared to the USD) and will continue to have large cost implications especially in the area of technology.

Becoming a deposit-taking institution has been a challenging undertaking, but Sinapi Aba is proud that it can now provide clients with a full range of financial services. Many of Sinapi Aba’s clients are experiencing the benefits of a savings account for the very first time.

Maintaining its focus on clients has put all of Sinapi Aba’s efforts in perspective. The financial institution looks forward to providing a growing number of Ghanaians with life-enhancing financial tools—including savings accounts—that equip underserved families to improve their financial stability and guard against key risks.

Over the next one to two years, the key activities will be:

• Continue to make upgrades to existing branches, and create a hub and spoke infrastructure to reach deeper into rural areas
• Expand use of mobile bankers in the markets, who act as susu collectors
• Obtain agency license from Bank of Ghana and employ agents across the country
• By the end of 2015, deposits mobilized will more than cover gross loan portfolio

For more information on SASL’s transformation, listen to the MicroLead webinar from November 2014 (https://vimeo.com/126387256) and see the webinar presentation.

[1] The exchange rate in march 2013 was 1 USD = 2 GHC and as of March 2015 it was 1 USD = 3.5 GHC