TN Holdings Limited group CEO Tawanda Nyambirai, who recently bulked up in the financial services group through a rights issue, says the company has a long-term view on Zambia where it may launch a bank and a furniture division, using TN Medical Services as a market entry point.
TN Holdings is parent to Zimbabwe’s sole virtual bank launched in May last year and four other subsidiaries namely, TN Medical Benefits Fund, TN Financial Advisory Services, TN Asset Management and TN Harlequin, a furniture division born out of the rubble of Tedco Holdings, which wound up and sold its interests to TN last year.
Through the deal, TN Holdings subsequently rebranded from TN Financial Services Limited and listed on the Zimbabwe Stock Exchange in January this year through a reverse takeover.
Nyambirai, in an exclusive interview, said his vision for the financial services company is to “replicate its Zimbabwe’s business model in Zambia”, a territory that a growing number of local entrepreneurs has fled recently, citing an unfriendly regulatory regime.
The list includes African Sun, Fidelity Life Assurance Company, Red Star Holdings. Although BancABC has ruled out a pullout, its Zambian operation is still treading on shaky ground.
Nyambirai, however, thinks he’ll pull the plug on this trend and successfully establish the TN brand in Zambia based on its unique entry strategy.
“We’re confident that we’ll make it in Zambia,” Nyambirai said.
“We’ve a clear strategy of establishing our brand outside the country. We’re aware that barriers to entry into the banking sector outside Zimbabwe are high. But we’ve three tools that we’ll use to gain a foothold.”
The tools, he said, include first setting up a medical aid fund and then issuing “the TN card”, a de facto credit card whose validity would be extended to shops retailing TN furniture products.
The credit facility would lay the foundation for the bank, while the furniture retail chain would form the mantle of its branch network.
“The bank will be the last, if we manage to build a good client base (for medical aid and furniture),” Nyambirai said, disclosing that TN Holdings had obtained regulatory approval from both Zambia and Zimbabwe to establish a medical aid fund called TN Medical Support Services Zambia.
The fund, which already manages funds worth $250 000, will be launched this year.
“Our aim is to establish our financial footprint on the back of the medical fund and furniture exports. The TN card will operate in furniture shops. We hope to introduce a furniture credit scheme from which the bank will emerge.”
From a low base at the beginning of the year, TN Harlequin has bounced back through a phased recapitalisation process funded by TN bank, and resumed furniture exports to the region, starting with Zambia, where demand is on the increase.
The capex includes the acquisition of a foam plant and spring-making and assembling machines.
Nyambirai explained that the external market penetration strategy was predicated on the “TN Model”, the centrepiece of the group’s organic expansion.
“The picture that’s not understood by the market is that we’re predominantly a financial services company.
The bank is our flagship. The furniture division is there to deliver financial services through credit.
The branches of the bank are also found in the furniture shops. That’s the core of our model, to deliver financial convenience through products produced by ourselves and partners such as Econet.”
The lawyer-entrepreneur said TN Holdings would not find it difficult to penetrate foreign territories because its key product offerings, a virtual bank and the TN medical fund, technically embodied both service-intensity and convenience that enhance global competitiveness.
“The impact and success of our virtual banking model in the country is overwhelming,” he said. “It’s being copied by other banking institutions. Our clients have been visited by our competitors claiming they are now offering virtual banking services. It’s a clear sign that the model has been effective”.
“TN Medical is also unique. Some countries don’t have medical funds; they use the traditional method of medical aid. We use the fund method. Your contributions remain yours. We give you our card; it guarantees you treatment at all private and public hospitals, general practitioners and specialists. We settle from your funds or contributions.”