Category Archives: UBA

TEF Forum 2016

The Tony Elumelu Foundation (TEF) staged its 2nd entrepreneurship forum on October 28-29 in Lagos, Nigeria. Billed as the largest gathering of African entrepreneurs, it featured 5,000 young attendees who were recipients  of funding and support from the Foundation through its TEF Entrepreneurship Program.

TEF Forum 2016

TEF Forum 2016

The meetup is one of the support structures under the TEF Entrepreneurship Program‘s 10-year, $100 million commitment, which aims to find, fund and support 10,000 entrepreneurs across Africa over ten years. In the first year, they had 26,000 applications, and for these second they got 45,000 from every African country and selected 1,000 who are eligible to receive up to $10,000 to implement their business plans.

The attendees got lessons in entrepreneurship from business, financial and international leaders and other mentors and partners in the program, on things like raising capital and getting started in their ideas, generating revenue and making their companies bankable through efficient financial processes, how to build structures so that companies can survive beyond their founders (“business in your head has to be decrypted so it can last 100 years”  – said the UBA CEO) and on how to live within their means.

They were also startled to see and hear from past recipients including one farmer from Uganda who’s won a  $70,000 NGO order, and a Gambian entrepreneur who’s gone from earning  $20,000 to $2 million in sales through exports of mangoes and groundnuts. Also, some of the suppliers at  the event such as the caterer were past recipients of funding and support from the program.

Uchumi: This Is It

It’s hard to believe that I’ve been writing about Uchumi Supermarkets for as long, as I’ve had this blog – about ten years. The company seems to go through a cycle every few years of capital injection, expansion & new store openings, shareholder reassurance, a few years of smooth sailing, followed by diminishing stocks of products, management change (Suresh Shah, Titus Mugo, Kennedy Thairu, Masterten-Smith, Jonathan Ciano), restatement of accounts, change of auditors, restructuring of debts etc.

At the 2010 special meeting of shareholders (during a receivership period), Kenya’s solicitor general (speaking for the government, which had bailed out the company) said nothing was fundamentally wrong with Uchumi when it collapsed, just bad governance.

But this time, it hopes to have put the past behind, and things are now looking up again for Uchumi. Its CEO, Julius Kipngetich, was on a TV blitz last week where he recapped the position that the supermarket is in and the way forward. Uchumi is now lean after laying off 2,300 staff, closing its unprofitable Uganda and Tanzania subsidiaries as well as 7 branches in Kenya, one of which was in a mall (Taj) that was going to be demolished for expansion of a highway. They are in the process of selling non-core assets (3 land properties), re-negotiating with suppliers to settle debts and (in exchange for some equity) resume supplies, and seeking a new strategic investor.

Some of these have now advanced recent announcements that most suppliers have agreed to convert some debt in exchange for  about Kshs 1.8 billion of equity in the company. Also the Ngong Road Hyper branch has been sold (but Uchumi plans to continue occupying it as a tenant) and just this week the Visa Oshwal Business Community, who comprise key suppliers,   agreed to resume supplying stocks, with one of them ending a lawsuit to wind up Uchumi.

Uchumi’s latest restructuring is happening is at a time when supermarkets are ‘apparently’ booming in Kenya. Nakumatt just opened its 61st stores, Naivas and Tuskys are growing, despite the family battles they have, Choppies (of Botswana) has taken over Ukwala and Carrefour has just opened at The Hub in Karen, in upmarket Nairobi.

Uchumi basket

Banks like UBA are ready to support. KCB has been a long terms banker, and Jamii Bora banks is the largest shareholder (15%) of Uchumi, closely follow by the government (14%).

Uchumi stores now have almost all products back on the shelves, but with some familiar brands still missing, for now.  As the CEO, said in one interview, Uchumi aim to serve middle class consumers, who want to buy Kenyan products .

In the next three months, they hope to narrow down a strategic investor to be the anchor shareholder of Uchumi, from a pool of bidders that were invited privately.

2009 Kenya Bank Rankings Part III – Other Intermediaries

In Part 1 was a list of all banks and Part 2 had the top 10 banks in Kenya this year. There are other financial intermediaries of note including:
UBA: launched in Kenya With a capital base of about 1.1 billion and now have 3 branches in Nairobi. UBA is reaching out to customers, embracing new media like blogs and twitter, – (@ubagroup and has gotten new funding – would rank in the low 20-soemthign of Kenyan banks after just a ½ year of operations
Faulu: Faulu Kenya Was licensed in July 2009 as the first deposit taking micro finance institution by the central bank of Kenya. Its balance sheet today would be about 6.5 billion, with over 2 billion in loans (last accounts seen are 2007)
KWFT: even larger than Faulu, is the Kenya Women Finance Trust. Its assets would be in the region of Kshs 15 billion, with about 12 billion in loans (extrapolating from 2008 accounts).
KWFT which is in government plans to convert to a women only commercial bank already has a national footprint or branch network that rivals any of the larger commercial bank and would rank somewhere in the teens of bank rankings

other intermediaries

SACCO’s: The Central Bank of Kenya estimates assets of the entire banking sector at Kshs. 1.18 trillion ($17 billion – CBK Governor speech in September 2009) while the Ministry of Cooperative Development estimates assets of the cooperative sector (SACCOS), with 12,000 societies and 8 million members at about 200 billion ($2.7 billion) – whose members save funds and borrow against these along with guarantees from other members in lieu of traditional bank collateral.

Some of the notable large SACCO’s (comparable in size to small & mid-size banks, but with larger customer bases) in the country are:
1. Harambee SACCO: (mainly civil servants) –with assets of 12 billion ($160 million), and loans of 7.5 billion and said to be the laregst SACCO in Kenya
2. Mwalimu SACCO: (mainly school teachers) with assets of 10.2 billion and loans of 9.2 billion
3. Afya SACCO: (mainly health industry workers) – assets of 4.75 billion, and loans of 3.79 billion
4. Kenya Bankers SACCO: bank industry workers with 3.3 billion in assets 2.8 billion in loans

Pepsi to Kenya?

. Nairumour that after an absence of many years, Pepsi will re-enter the Kenyan market in the near future to resume battle with Coca Cola, possibly through their South African partners. If so, it will cap a great year for investment to the country, and that despite 2008 being a relatively tough year for investors and companies, with the post-election violence, business disruption, high fuel and energy prices, depressed consumer spending, P & P madness (pirates and politicians) collapsing stockbrokers, there was a steady flow of new investments and new products that happened this year.

Re-cap of some notable ones

Banking
– Takeovers concluded – Ecobank take over of EABS, and Stanbic merger with CFC (now CFCStanbic)
– UBA licensed (2009)
– Gulf African and First Community (Shariah banking kicks off)

Beverages
– Summit Lager a new beer from Keroche Industries
– East African Breweries launched Alvaro (malted soft drink)
Coca Cola launched Novidia (another malted soft drink) and also started selling Minute maid
– KETEPA launched Safari Iced Tea

Communications
– WPP buys into Scangroup
– 2008 saw the launch of two new mobile operators – Orange (France Telkom) and Yu (Essar/Econet) to battle Safaricom and a re-energized Zain
– Altech buys into KDN
– A long-running fight over one(EASSY)submarine cable, gave birth to three different ones being laid to Mombasa
– Wananchi launched Zuku (TV, Broadband, Phone)

Transport, Energy & Manufacturing
– Tiger brands buying into Haco
– An investment in the Kenya Oil Refinery at Mombasa was still under battle between Libyan and Indian Investors
– Jinchuan (China) to bail out Tiomin?
– Mirambo and PD Toll to salvage the Rift Valley Railways
– Delta Airlines (USA – but postponed to 2009)
– Air Arabia started flights to Kenya

Tourism
– Libyans took over the Grand (Laico) Regency
The Tribe opens.

Exits
– Chevron (Caltex) sold out – bought by Total
– Unilever (de-listing from the NSE)
– Roy Puffet from rift Valley Railways

Bank waters

In the pool

Diving in: Another West African bank giant UBA follows Ecobank after apparently having secured a banking license to operate in Kenya.

Treading in the shallow end: Still finding their ground are the new Islamic BanksGulf African and First Community that started business last year. They are likely to be the only banks that will record losses of at least Kshs. 200 million each as their new branches and staff continue to reach out and educate customers on a new way to bank.

Had enough swimming?:
(i) Morgan Stanley who were supposed to introduce long term foreign investors to Kenya with a five year window or longer, but instead brought in short term investors at the expense of the Government and othrr investors who took out their profits in a week. Another lesson learnt a long way back from the IPO.
(ii) The Kenyan unit of Citi is on track to rake in profits of $50 million this year on the back of aggresive trading, but will it be enough, or will it be bled off by the parent unit? And who would buy it and its lucrative American interest-linked business portfolio?