Bank pricing, Microfinance, Bank business model, Strategy
By May 2007, African Bank Investments Limited (ABIL), under the leadership of Leon Kirkinis, had become one of the predominant players in the provision of financial credit services to the mass employed population of South Africa. Over the years, it had worked very hard to attain the position of market leader in the microcredit industry (with an estimated 31% of total industry loans), using a focused cost differentiation strategy that had enabled the company to achieve the lowest cost to income ratio (27%) in the industry. Kirkinis was proud of ABIL's achievements to date. However, he was concerned about what the bank could do to improve its competitive edge and extend its reach in the face of its major future challenge: taking advantage of the largely untapped but highly lucrative, small-, medium- and micro-enterprise (SMME) sector of the market.