LAPO MFB and the perils of market leadership, By John Ebun Ajayi

Two weeks ago, several mainstream newspapers as well as some online platforms ran a disturbing news item: a customer of LAPO Microfinance Bank, an elderly woman in Abeokuta who could not bear the ceaseless harassment over a N70,000 debt to the bank which she couldn’t pay, had taken the drastic and irrefutable step of committing suicide. According to the reports, the woman had decided that death was preferable to the public odium she was going through.

The news reports were apparently based on a trending video in which a man identified as a local broadcaster was regaling a crowd in Yoruba with details of the incident spiced curses against the bank. It was a tragic and dramatic tale of human tragedy and corporate wickedness. But there was a little problem. LAPO Microfinance Bank had no connection with the Abeokuta tragedy.

As Abel Ovenseri, LAPO MFB’s Acting Head, Communications and Branding clarified in statement issued in the wake of the lurid but inaccurate reports, the woman who reportedly committed suicide was not a customer of the Bank so the allegation that her death was caused by harassment by the bank’s representatives was simply not true.

In his words: “Contrary to the allegation in a trending video on social media and reported in some newspapers, the woman in Ogun State who reportedly took her life over her inability to pay back a loan was NOT a customer of LAPO Microfinance Bank Limited (LAPO MFB). From our preliminary findings, which we are confident will be confirmed by an official independent investigation, she was a customer of a different financial institution, which the unsuspecting public misinterpreted as ‘LAPO’.”

While commiserating with the family of the deceased lady, the bank spokesman noted that “there has been an increase in similar false allegations against LAPO MFB by persons who are pursuing an agenda”, asserting that the institution “is exploring legal options against such purveyors of fake news, demarketing and other unethical practices”.

The Abeokuta incident and other cases of wrong or malicious labelling against LAPO MFB underscore some of the challenges faced by companies that are either market leaders in their sectors or have an overwhelming presence in terms of consumer perception and loyalty. While they enjoy strong advantages on key metrics such as brand loyalty, market share, distribution, price, perceived value and profitability, they also receive a disproportionate share of blame, real or invented, when things are perceived to have gone wrong.

In a recent social media post, Dr Godwin Ehigiamusoe, chairman of the LAPO Group gave an intergenerational insight from the Nigerian perspective into the appeal of strong brands and the baggage that often comes with it. According to him: “Growing up, Daily Times was another name for newspapers. Omo detergent was what all detergent brands were called. Maggi was another name for all food seasonings. For most owners of micro and small enterprises, another name for micro-loan from any microfinance bank or institution is ‘LAPO loan’. Great benefits with great brands; sometimes, as we have come to realize, there are pains.”

As the leading microfinance bank in Nigeria with a customer base of about six million and strong presence both in urban centres and rural communities, LAPO MFB is the major face of micro finance banking in Nigeria. The bank’s impact especially among customers in the lower demographics who have benefited from its diverse range of products, services and social initiatives has made it the default micro finance bank in the minds of many. This profile is a huge asset because it underscores the depth and relevance of the LAPO brand. However, it can also be a magnet for genuine errors, careless distortion and orchestrated disinformation. The Abeokuta incident is the latest example of many.

The overwhelming physical and perceptual presence enjoyed by market leaders like LAPO can also attract a lion share of hostility from unethical rivals as well as various kind of mischief. Their ability to leverage their position to achieve cost efficiency and deploy their size to maximize economies of scale can inspire envy and its associated consequences. Sometimes, they are victims of genuine mistake as the top of the mind status they enjoy can also lead to mislabeling as they get the blame for wrong things done by others in the same industry.

Of course, the ubiquitous presence of market leaders and the associated challenges is not confined to Nigeria. As an article by the CFI (Corporate Finance Institute) Team explains: “In India, the top seller of ramen noodles is a brand called Maggi, which has become a term used interchangeably with ramen noodles. Similarly, Sony introduced an MP3 player called the Walkman, which was more commonplace than the term MP3 player. Also, Apple sells MacBooks and iPhones, while other companies sell laptops and smartphones.”

As the late MKO Abiola was fond of saying: “the bigger the head, the bigger the headache”. LAPO, like other market leaders across the world, must manage the inevitable pains that come with the respected position and loyalty it enjoys in the hearts and minds of millions of customers and beneficiaries across the country. While it works to tackle distortions and calculated mischiefs, this remarkable organization can take comfort in the fact that the positive impact it is making in individual lives, businesses and communities is worth the pain.

*Ajayi is a public affairs analyst.

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