RenCap sets up Nigerian finance business

Renaissance Capital is setting up a consumer finance business in Nigeria as the Russian bank hopes to tap the fast-growing economy’s rising middle class and diversify further from investment banking. The privately owned investment bank, which almost collapsed a few years ago and is under pressure from state-owned rivals in its home market, has hired half a dozen bankers to start what it claims to be the first Nigerian consumer finance business by the end of this year. RenCap is hoping to replicate the success of its Russian consumer finance business, which eight years after its start has 5m customers, 4,500 employees and is targeting $130m in operating profit this year.

Stephen Jennings, RenCap’s founder and chief executive, said the economy of Nigeria, with its almost 160m inhabitants, would be ideal for a technology and scale-driven consumer finance business. “This can become a bigger and more profitable business than the one we have in Russia,” he told the Financial Times.

The Nigerian economy has grown more than 7 per cent on average over the past three years, according to International Monetary Fund estimates. But a banking investment into Africa’s largest oil producer is still seen as risky, and the IMF has recently warned that poverty remains high.

George Taylor, head of RenCap’s consumer finance business, said the bank was aiming to provide unsecured cash loans and point of sale lending to those 22m people in the country who already have a bank account.