UT Bank: Business Model Innovation for Creating Productive Customers in Africa

Companies all over the world find it difficult to identify the needs of the market and provide a market offering that suits the needs of the population. This challenge is further aggravated in emerging markets, which were perceived by many companies as not profitable to business. However, this perception has changed over the years following a renewed interest in emerging markets and the realization that identifying a particular segment in the market and the ability to meet the needs of an emerging market is not only possible but extremely profitable. This case is about UT Bank, a company set up by Prince Kofi Amoabeng, a retired Army officer in Ghana, and his business partner, Joseph Nsonamoah. The company began as a non-bank financial institution in the central business district of Ghana’s capital city, Accra in 1997. The company was initially called Unique Trust Financial Services, which became UT in later years. UT grew over the years and it eventually acquired a bank that was not performing very well. UT Bank was part of a group called UT Holding Ghana Ltd with ancillary business divisions that helped the company to draw on the synergies of the different business branches. These branches included: UT Properties, UT Logistics, UT Collections, UT Private Securities and UT Insurance. Additionally, the Company expanded geographically and had offices in Germany and Nigeria. As of 2011, the Company had plans to expand to other African countries, such as South Africa and Zambia. UT was able to identify a market segment that had long been ignored by the financial sector in Ghana — the SME and informal sector — and was able to design a market offering and business model that suited that segment and was profitable to the company. The case discusses the business model of UT Bank and its ancillary business divisions. It shows the interrelationships between the ancillary business divisions and UT Bank and illustrates how UT was able to draw on the synergies from its ancillary companies to set itself apart from other companies in Ghana’s financial sector. The case is ideal for EMBA and MBA programs that discuss business models in emerging markets and courses that discuss the Bottom of the Pyramid (BOP) population. It can be used for courses at the master’s level that relate to innovation, entrepreneurship, business strategy, marketing and international business.