22 Oct 2020 / Article

The Waznes place all their bets on Africa

Representing the third generation of the family on the continent, Henry Wazne has taken the family business to new heights in the Democratic Republic of Congo through the incredible turnaround of Sofibanque. But not satisfied with hitting the jackpot in the financial sector alone, this insatiable entrepreneur recently made inroads into the insurance business. Is his plan to break the bank again?

In 2012, Abdallah Wazni (1) was going through the darkest days of his entrepreneurial career. Sofibanque, the DRC financial institution in which he got involved in 2006 along with various other Lebanese investors, was doing poorly. Very poorly. With hardly 300 customer accounts under management, the bank was losing $150,000 every month. Given the risks they faced, Abdallah’s financial partners decided to pull out of the investment. Not wanting to let go so easily, he took a true gamble by buying their shares and becoming chairman of the board. At that point, he played his wild card by asking his cousin, Henry Wazne, who was living in Monrovia, Liberia at the time, if he was interested in helping him rescue the bank and take up the post of director and CEO. Eight years later, this crazy bet has turned into an incredible success: Sofibanque manages nearly 100,000 accounts and makes a net profit of $10m.

The Wazne family’s love for the continent is nothing new. “The family has been in Africa since 1917,” Henry says proudly. That was the year that Henry and Abdallah’s grandfather left Lebanon and landed in Sierra Leone, where he would launch his first businesses trading in Mande country in Bo and Kenema. From this home base, the family gradually expanded to Liberia, Guinea and the Democratic Republic of Congo. Both Henry and Abdallah belong to the family’s third African generation. The first generation was born in Liberia and the second in Sierra Leone. “We have a good handle on Africa,” says Henry, smiling. He has been living in Kinshasa ever since the beginning of his risky Sofibanque venture. “We are African, end of story,” he adds. A legal expert by training, Henry has a brother in Monrovia and another in Conakry. He worked for a long time for the family’s Liberia-based business, Wazni Trading Corporation, handling humanitarian logistics from 1992 to 2009 alongside his younger brother, Dany. At the end of 2009, the family business brought him all the way to Afghanistan. Once back on the continent, he moved to Conakry for a year to participate in the development of his older brother’s mining logistics company. After that, he came back to his home country. 

In parallel, Abdallah chose to make a career in the DRC, where some family members had been in business since 1983. He started out as a mobile phone distributor for Airtel, Vodacom and eventually Orange, back when the telecoms sector was in full swing. Commissions were over 10% at the time. And this is how he ended up investing in Sofibanque in 2006. “Today, it has become one of the most profitable banks on the market,” Henry boasts. It’s even the second-largest taxpayer in the DRC’s banking sector, with the best solvency ratio. The bank’s fundamentals are strong and its greatly expanded customer portfolio includes foreign embassies and the World Bank. 

Yet, looking back, Henry admits that “venturing into the banking sector was a risky bet”. He adds: “The odds of being successful as a family bank were very limited. And all the more so in the DRC, a country known for being one of the most difficult on the continent.” Indeed, the graduate of the University of Nice Sophia Antipolis didn’t have any training as a banker and his competitors thought the bank was unlikely to make it. After it got its fundamentals back on track, in 2014 Sofibanque began receiving the backing of the Embassy of France and the Kinshasa-based French cultural institution, Institut français, which made the DRC financial institution its bank of choice. That same year, the World Bank also opted for Sofibanque’s services. This vote of confidence would help the two cousins attract a new customer base made up of key accounts, including the French family-owned groups Castel and Bolloré. The Franco-Lebanese national – who doesn’t have a Liberian passport because such documents are only available to black Africans – based his strategy on “the customer experience and high-quality service”. 

While his origins have helped him form close ties with various players, they have also held him back at times. “Suspicions” surrounding his “Lebanese origins”, as he puts it, have also provoked hostility and mistrust. In Henry’s view, another aspect is even more harmful: ”In Africa, states don’t help family businesses become major pan-African groups.” He backs up his assertion by pointing out the continent’s high tax rates on such businesses in comparison to those applied to major international companies. “Family businesses are underestimated by African governments,” he laments. Nevertheless, in DRC as elsewhere, family businesses have a considerable impact on the economy. For example, they sustain more Congolese families and pay more in taxes than the entire mining sector. Sofibanque is a prime illustration of this, as it employs almost 250 people and reinvests 90% of its profits back into the country. 

The institution’s ambitions, backed by a balance sheet of $350m, don’t stop there. The family-owned company, which handles close to 2,000 transactions per day, has its eye on neighbouring countries. Its expansion strategy even includes the opening of four to five branches through local partners in central African countries. The first milestone of this long-term vision will be the construction of a regional headquarters in Kinshasa, which will serve as a home base for opening subsidiaries. But Henry continues to be focused on consolidating his prior achievements and strengthening internal procedures because “the bank needs a very strong back office”. Of course, Sofibanque has also begun digitising its banking services. For instance, it’s the first DRC-based bank to pay its employees’ salaries using mobile money. And a new “wallet-to-bank” product that allows customers to transfer money directly into their bank account using their mobile phone is currently being developed, while remote account management tools are also in the works.

To finance its growth, Sofibanque has teamed up with well-respected partners such as Afreximbank, which didn’t hesitate to inject $10m into the institution. Talks are also in progress with Proparco. However, as things stand, the Monrovia native doesn’t plan on maintaining a family dynasty at the management level. “The bank is not necessarily destined to be passed on” to future generations, Henry concedes. But the same can’t be said for the family’s new insurance business, launched in June 2019 following the liberalisation of the sector, which Henry believes has “fewer exogenous risks”. The two cousins invested $10m in their new entity, Société Financière d’Assurance (SFA). They have partnered with the French reinsurance company SCOR (Société Commerciale de Réassurance), which left the DRC more than 20 years ago. SCOR is their lead reinsurer, meaning it’s tasked with “insulating” them from outside risks. And the partnership has proved a success! SFA currently represents big names in the DRC, including Allianz, AIG and Cigna, has already collected more than $35m in premiums and can pride itself on having turned a profit. By comparison, the largest Ivorian insurance company collects around $50m in premiums annually. 

The Waznes thus have a new card to play more than a century after the start of their African adventure. They are getting on in years, certainly, but it doesn’t seem to count against them.

 

(1) Wazne spelled with an “e” is the phonetic transcription in English of the family’s Arabic surname. In French, their surname is spelled with an “i”, i.e., “Wazni”.

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