In building a financial empire in Malawi, Thomson Mpinganjira FCCA, CEO of FDH Financial Holdings, has taken the country’s finance infrastructure to a whole new level
This article was first published in the May 2019 Africa edition of Accounting and Business magazine.
ACCA has a lot to answer for, according to Thomson Mpinganjira FCCA. ‘Everything I have done in my career in some way goes back to my ACCA Qualification and my early training with Deloitte,’ he says. ‘These two institutions shaped my life.’
Those valuable early lessons he learnt have been turned into some astonishing firsts. An accountant turned stockbroker, Mpinganjira set up the Malawi Stock Exchange in 2000, served as its first CEO, and in 2008 opened his own commercial bank, FDH Bank, headquartered in Blantyre, Malawi’s second biggest city. The group chief executive of FDH Financial Holdings, he is one of the leading Malawian business figures of his generation.
Mpinganjira’s first job was with Deloitte, making many contacts in his five years there who would prove significant later on in his career. He is an inveterate networker and hopes to pass this valuable skill on to his staff – the group currently employs 800. ‘After I retire, if networking does not carry on, everything will change,’ he says. ‘Networking is all about staying relevant in society.’
Following a couple of corporate accounting roles and a risk management position at a bank, he was one of the first into the burgeoning capital market in Malawi. That stint in banking paid off handsomely in helping him reap the benefits of being an early adopter. ‘I was ahead of everybody because I had initially worked for National Bank of Malawi, the largest bank in the country,’ he explains.
While he was at the bank, a former Deloitte partner told him of an opening in a new financial institution. That conversation led him to become Malawi’s first stockbroker with Stockbrokers Malawi (majority-owned by the bank), which set up the Malawi Stock Exchange in 2000, appointing Mpinganjira its boss, and he subsequently launched FDH Bank.
‘I was able to network with a lot of contacts, both in south-east Africa and internationally,’ he says. ‘This experience also introduced me to many business concepts in the financial sector.’
Using that knowledge and experience, he had already started making plans to set up a financial services business. First Discount House (which became a subsidiary of FDH Financial Holdings as part of a group restructuring exercise in 2007, when he also acquired a licence for FDH Bank) opened its doors in 2002.
‘From that point onwards, everything I have done has been planned ahead,’ he says, although he admits that his initial planning for FDH did not envisage the scale of the business as it is today. ‘I thought setting up the money market institution would be the end,’ he explains. ‘I never foresaw it would go this far. But once you are in business, events dictate to you – including when you are on the ropes or when you’ve reached a plateau. They force you to think of other things you can do.’
After money marketing with First Discount House, ‘the obvious next step’ would have been to open a bank of his own, but as that opportunity was not immediately available he set up his own stockbroking firm as a further step towards building a financial empire. Mpinganjira says his main motive in all this has been to leave a legacy of a family business that would carry on after him. ‘I looked at Asian and European businesses that were handed down the generations and I wanted to replicate them,’ he says. ‘I think I have achieved that.’
Qualified in 1990 as an ACCA, after his stint at Deloitte he moved into industry, working as a senior accountant at Blantyre Printing and Publishing, group accountant at Mandala, head of risk and security at National Bank of Malawi, and CEO at Stockbrokers Malawi. ‘Joining Stockbrokers Malawi was the turning point,’ he says. ‘The job just suited me. From that point I never looked back. But the real differentiator was my accounting qualification. I worked in operational risk management where the ACCA Qualification and my audit background were key. In terms of a grounding in business there is nothing I would have done differently.’
Those two elements remain relevant to the role which Mpinganjira plays today, helping him understand the issues facing FDH. In some parts of the world, the value of audit may be questioned, but Mpinganjira says the discipline has helped give him the edge and is critical to a well-run business. ‘Companies need that assurance that all is proper. In audit you are exposed to business, especially risk, general accounting, financial management and ethics right at the top of the organisation.’
As group chief executive, he sees his job as to run FDH Financial Holdings as a profitable and ethical business for the benefit of the shareholders. Responsible for strategy and strategic implementation, he is aware of the political nature of the diverse role, accountable to stakeholders, the public, government and his board of directors.
Can you hear just a hint of regret as he notes that his role is ‘no longer really operational in terms of the nuts and bolts of business’? Managing directors for the different businesses report into him.
Mpinganjira has a clear definition of strategy: ‘It is about deciding where you want to go, what you want to do and how you are going to arrive there. You have to check that your strategy reflects the ever changing environment.’
In financial services that change is seen in areas such as regulation and technology. In the decade since he launched FDH Bank, Mpinganjira and his team have had to change as the rest of the sector has to ensure the business has a digital presence as well as the bricks and mortar branches.
Mpinganjira suggests that financial services is the only thing he knows, before adding with a smile: ‘But I know it very well!’ He admits that the senior position can be a tough one, and says his board and his colleagues always refresh him.
He points to ever changing regulation as one of the biggest challenges for leaders in financial services, with the provision of capital being the one issue that can keep him awake at nights. ‘Banking is about capital,’ he says. ‘If you look at the regulations – for instance, Basel and the international accounting standards – it is all about having enough capital.’
He offers the same deceptive simplicity when defining leadership. ‘It is about making decisions, right or wrong,’ he says. ‘You have to provide direction and move forward, and if the decisions you make turn out to be the right ones, then you have really hit the jackpot.’ But he also emphasises the need for a team who can provide information to help make decisions. ’And after you receive all that information, never, never, never be afraid to make a decision,’ he advises.
He says he comes to work with a plan each day, but points out: ‘I’m not a machine – I work on what is important that day – but I always keep my eye on the goal.’
His management style includes an open door policy. ‘I have been told that I should only see people by appointment,’ he says, ‘but I have failed to be that type of person.’
Ethics are essential
One kind of person he has not failed to be is an ethical player. He has a strong sense of corporate social responsibility. For instance, FDH funded the refurbishment of a children’s intensive care unit at a hospital in rural Makwasa, southern Malawi, where he sits on the hospital board.
‘You are giving back to the people you are doing business with but without expecting to benefit as a business in any way,’ he says. Other schemes supported by FDH include providing colleges with computing and comms equipment and supporting girls’ education initiatives.
Mpinganjira is a long-standing member of the ethics and investigations committee of the Institute of Chartered Accountants in Malawi (ICAM). He says: ‘Ethics is core to us as professionals and practitioners. It is key not only to the profession but to the economy as a whole. Corruption is a killer, and ethics is the only way to stop it.’
Although he believes that corruption has been ‘endemic’ in the country, he remains optimistic about the future and the country’s institutions coming together to tackle the issues. Even social media is helping: ‘You mess about, and news travels fast…’
One of his aims is to expand financial inclusion in Malawi. The government is looking to double the figure for Malawians able to access financial services from 34% (at the last count, in 2018) to 70% in 2021. That, he says, will help to grow business, raise living standards and bring more people into the net of taxation required to fund vital government services. Part of the problem for ordinary Malawians is a lack of access to capital to finance business startups, but as Mpinganjira says: ‘The ideas must come first.’
He says he still has things to do for the group before he can think about stepping down, including floating FDH on the stock exchange, a process that has taken longer than he hoped. ‘I want to take the bank beyond Malawi into this region of Africa. And I want to inspire my people so when I go they will keep the vision. I will keep on dreaming.’
Peter Williams, journalist
"In business, events dictate – including when you are on the ropes or have reached a plateau. They force you to think of other things you can do"