Joshua Oigara, the Group Chief Executive Officer of the Kenya Commercial Bank Group speaks during a Reuters interview in Nairobi, Kenya July 11, 2018. REUTERS/Jackson Njehia Covid-19 has hit African economies hard, and Kenya is no exception. Longstanding businesses in tourism, agriculture, logistics… everything came shuddering to a halt. “We prepare, as a bank, for many difficult situations”, says Joshua Oigara, the CEO of Kenya Commercial Bank (KCB), a leading bank in East Africa. “But we never imagined a pandemic!"
Coronavirus clearly accelerates the trend to digitalisation, worldwide.
How then did it affect a country ahead of the digital pack, such as Kenya, which since 2007 has been zapping cash around the country with phone-to-phone money transfer, M-Pesa? “I think we survived because if migrating our transactions to the digital channels where we already had success”, says Oigara. “More than 98% of our transactions are already out of our premises, and we saw a fourfold increase in digital transactions since last March”.
It has allowed the bank to execute debt relief remotely. “Nearly 35% of our loans have been rescheduled, on average for 6 months, and that is in addition to the almost $1bn in the last 11 months to cushion customers through the impact of the pandemic”, says Oigara. He is pessimistic about the survival of some businesses in the tourism and aviation sector, but Covid relief is no longer being extended, and “we believe that 90% of our customers will return to form by the end of 2021”. Kenyan banks ahead of the pack
The digital advance of Kenyan banks has certainly given them a solid defensive posture. But it is on offence that their strength shows through.
KCB purchased two banks in the last six months, the Banque Populaire du Rwanda and the African Banking Corporation in Tanzania, from the Atlas Mara Group. Meanwhile, KCB’s biggest domestic competitor, Equity Bank, purchased a bank in the Democratic Republic of Congo (DRC), the BCDC.
Did it sting to see a rival steal a march in the DRC, one of the great opportunities of the 21st century?
“I don’t think it is a question of who goes first, it’s a question of what kind of asset do you get and are you able to integrate it and build the service levels for clients”, says Oigara. “Our ambitions have not been shaken. The market is still untapped in the region, we need more banks [from […]
