Less than a year after joining the board of African Bank Investments Limited (ABIL), the newest director finds himself in difficult discussions with other directors about removing the struggling company’s CEO. The case is set in South Africa in mid-2014 as shares in ABIL, which traded on the Johannesburg Stock Exchange, are declining precipitously. The case describes ABIL’s origins and evolution, including the acquisition and growth of its wholly owned subsidiary African Bank, a provider of unsecured loans to help individuals pay for expenses such as vehicle repairs, home renovations, funeral costs, medical bills, and education. As ABIL’s profits rose and share price soared, it became the darling of analysts. However, when the South African economy turned sour, customers started defaulting on their loans, and ABIL and African Bank began to struggle. As ABIL’s stock price dropped, the management team faced difficult questions about the company’s lending practices, risk management processes, and plans to turn the business around. By 2014, the situation was grim, and pressure mounted from shareholders and market regulators for the board to take action. The case details the history of unsecured lending in South Africa, describes the regulatory, social, and legal contexts for the company and its business model, and explores the company’s unique corporate structure and executive and director dynamics.
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Pippa Tubman Armerding joined Harvard Business School in 2017 as Director for the HBS Africa Research Office, opened this year in Johannesburg, South Africa. Pippa’s work spans sub-Saharan Africa, with a particular focus on the development of cases and support for faculty research in the region. She also plays an important role in establishing and fostering relationships with companies and alumni in Africa on behalf of HBS.
A lawyer and strategist with 20 years of experience as an attorney and business professional operating across Africa, Europe and North America, Pippa has held a number of leadership roles with large multinationals working across the continent. Prior positions includes serving as Director of Legal and Corporate Affairs for Microsoft South Africa, and Director of Pan-African Strategic Initiatives for Coca-Cola South Africa.
As a graduate of Harvard College, Pippa has been an active alumnus, serving in a number of volunteer roles for the alumni community in South Africa. In addition, Pippa holds a JD from New York University, specializing in international law, and is fluent in French. Raised in Liberia, Pippa returned to Africa 13 years ago and has since lived in South Africa and Kenya.