Category Archives: bank service

Bank Clerk in the Kenya Colony

In April 1923, the East African Standard, ran an anonymous blog-like column by a bank clerk in the Kenya Colony. He narrates how he wakes up slowly, is brought tea by his servant Juma (which means Friday), then is brought his bath, of which there are two types, before he goes to work.

Excerpts:

“… and then on to the business of the day. Monotonous life? don’t you believe it! I doubt whether a bank clerk’s life is ever really monotonous as some make it.

In Kenya, it certainly is not as our customers are so varied. One minute, a newly-retired colonel of the Indian army, moustache and all. Next, a retired lieutenant commander from the Navy who perhaps goes one further and sports a beaver. Then one of the boys – Navy, Army or Air force for the duration, now farming. Then a lady farmer, charming, even wearing breeches. Government officials and visitors.

In they come, day after day. Monotonous? Never. All as different as chalk from cheese except in two respects; they are all jolly good sorts and they all want overdrafts.

It’s all very well to be light-hearted about it but I am afraid that we often miss the gleam of bitter sadness which lies behind it all. Kenya is a young colony and fortunes cannot be made in a day. There are as many who failed to grasp this. They come out here with family and little else. The wife is still here, the family perhaps has increased but an ominous overdraft and a mortgage form have taken the place of the little ones.”

The day ends with sundowner drinks and an early night, to be repeated all over again.

Which way the bank branch?

This month saw Family Bank open a branch in Eastleigh, its 92nd in the country. Family is one of the pioneers of paperless branches and had opened another branch in December near the large Wangige market to serve traders. Eastleigh is an important cog of Kenyan supply chains and is estimated to have the second-highest density of traders, second only to the Nairobi CBD. Despite advances in mobile transfers, small traders are still heavy users of cash for transactions.

Then today Diamond Trust announced the consolidation of six branches that are adjacent to each other: Oval and 9 West (both to Westgate), Eastleigh to Madina Mall, Garden City to TRM mall, Jamhuri Street (to Malindi) and Kago Street (to Eldoret). The bank asked customers to continue using alternative channels while staff will be redeployed to other branches and business units.

We can probably expect to see more branch consolidations or closures as two groups KCB-NBK and NCBA (CBA & NIC) continue to refine their new operating structures. CBA and NIC did some closures last year.

When KCB announced their third-quarter 2020 results, they shared some interesting details about branches and the march to digital. KCB branches did 2% of transactions in Q3 2020 compared to 5% the previous year. Also, there was a 16% decline in transactions done per day by branch tellers from 60 to 50, while customers did 43% fewer transactions (5.8 million compared to 10.2 million) than in the previous year. KCB customers did 77% of their financial transactions on mobile phones, 17% at agents / internet / point of sale (cards), and 4% at ATM’s. More ATM’s now accept cheque deposits, not just cash, and also act as 24-hour M-Pesa agents.

The Central Bank of Kenya’s Supervision Report for 2019 shows KCB with 203 branches, followed by Equity with 171 (and 12 sub-branches), Co-op Bank 152, Absa 107, Family had 92 in 2019, NBK 78, and Diamond Trust 70. Between 2018 and 2019 there was a drop of 16 branches from 1,505 to 1,490 with 7 of them in Nairobi that ended 2019 with 593.  NCBA has 37 branches but serves the largest number of bank customers in Kenya by far, 31 million thanks to M-Shwari, its partnership with Safaricom.

Outside the country, there is growth as Kenyan banks operate 316 branches in the region, up from 207. They are led by Equity that has 44 in DRC and 39 in Uganda,  Equity has a total of 116, followed by Diamond Trust with 68 (36 in Uganda, 28 in Tanzania, 4 in Burundi)  and KCB with 60.

During Covid-19, foot traffic has reduced at malls, offices shopping centres and bank branches. This has also been due to the growth of online shopping that has taken off exponentially, and many facilities now have dedicated desk and parking spaces for motorcycle delivery riders.

No sign yet of banks moving to share branch spaces with each other but there is less need for banks to be on the ground floor of buildings, which is usually more costly. Also, shopping malls tend to have a banking floor (top of Garden City mall) or ATM corner where several bank services are grouped.

Absa Kenya One Year Anniversary

Absa Bank Kenya celebrated its one-year anniversary at its newly-redesigned Queensway Branch in downtown Nairobi today. It has been a strange first year for Absa which completed the transformation from the Barclays brand in February 2020, three weeks days before Kenya was enveloped by Covid-19 and underwent a shutdown that, while it has progressively reduced, still affected thousands of business, jobs, and customers, as well as the bank itself.

Speaking at the event, Absa Kenya Managing Director Jeremy Awori said the bank had a great strategy to grow and expand, then Covid-19 hit and the year turned to be one of the challenges for the bank, industry, local and global economy. Absa also began to see opportunities for impact and to demonstrate its humanity and innovations to enable the bank to serve customers as they worked to rebuild their livelihoods. They adjusted to have half their staff work from home and instituted a shift arrangement for front-line workers and these enabled 100% of branches to remain open, while the digital platforms had 99% uptime.

Absa offered financial relief to help customers navigate the pandemic after many lost jobs and businesses. They restructured Kshs 62 billion worth of loan repayments, extending relief to over 59,000 customers. They also continue to lend a sizeable amount to SME’s to stay afloat and provide employment, and also committed to paying small suppliers of the bank within seven days to boost their cash flow.

He added that the bank was cautiously optimistic that 2021 will be a better year, with news of vaccines giving confidence to business and governments to relax containment measures and turn to boost economies. Absa Kenya will invest Shs 1.6 billion in 60 technology projects to enhance customer experiences. One will be to automate loan top-ups, allowing people to get loans on top of existing loans, and another will be a new online business-banking platform.

Absa Kenya Chairman Charles Muchene said the bank contributed Shs 50 million to the Kenya Covid Fund, invested Shs 30 million in initiatives led by partners, and donated 210,000 masks for medical workers, with another 20,000 to boda-boda operators. The bank is now asking Kenyans to join and to help underprivileged. They launched a “Wall of possibilities” for people to write suggestions or ideas on the bank’s social media pages or at the Queensway branch on ways that the bank can assist communities to benefit. Absa may fund each idea with up to Shs 2.5 million.

Stanbic Bank “It Can Be” launch

Stanbic Kenya has launched “It Can Be,” a new way of engaging with customers, particularly with women and small & medium enterprises. Stanbic is the second-oldest bank in Kenya, having started over 100 years ago and grew to later merge with CFC Bank in 2007. Today, it is a Tier-I bank with $3 billion assets in Kenya and serves over 200,000 customers with services in corporate & retail banking, wealth management, investments, and insurance.

“It Can Be” symbolises a new push to engage with customers, in the new decade, beyond Stanbic’s 26 branches in the country. The bank has transformed and adopted digital-based solutions to serve its customers who have also largely shifted to online and digital after business disruptions with the emergence of Covid-19. One new Stanbic tool is automating core functions in documentary trade finance using artificial intelligence (AI) and natural language processing (NLP) for real-time counter-party verification, giving customers quick feedback while reducing trade risks.

The “It Can Be” brand ambassador is Brigid Kosgei, the women’s marathon world-record holder.

Stanbic Kenya CEO Charles Mudiwa spoke at the “It Can Be” launch and mentioned how Covid-19 had shown the importance of relationships and standing with communities. He added that the bank’s customer focus had shifted to being relationship-based and Stanbic has embraced four policy initiatives of funding, markets, business competitiveness and influencing policy. In its third-quarter 2020 financial results, Stanbic Kenya announced that it had extended loan restructurings to 23% of its customers, at no cost, to cushion them from the effects of Covid-19. It also reduced the interest charged on existing loans and waived charges for using the bank’s digital platforms.

Stanbic is the largest bank group in Africa, with $151 billion in assets and a presence in twenty countries on the continent. Its largest shareholder is the Industrial and Commercial Bank of China, the world’s largest bank that owns 20.1%. Stanbic Kenya is listed on the Nairobi Securities Exchange (NSE) and shareholders receive a high dividend yield of 8%. Stanbic Africa is also increasing its shareholding of the Kenyan bank to 75% by buying shares from other shareholders.

The Creative Sector in 2020

The Africa Digital Media Foundation (ADMF) has published a comprehensive report on the state of the creative sector in Kenya and the needs, challenges, and ambitions of its participants. ADMF started the study with a questionnaire that was widely circulated and completed the research in July 2020 using online forums and tools.

Summary of their findings:

  • There is a willingness in the Kenya creative entrepreneurs to make things better for everyone.
  • Success breeds success and the creative population is divided between those that have made it (and keep grabbing jobs and clients) and those that have not (less- established creative entrepreneurs who may have few years of experience, little commercial and financial success)
  • All want opportunities to learn more; they accept that technology evolves and new products require new skills.
  • Banks don’t understand; formal credit and financing options aren’t considered viable options by creatives; their financing is limited to sourcing from friends and family.
  • Almost everyone had a story about doing work and not receiving payment as agreed from the client.

Other interesting findings in the report:

  • Top engagements are in TV/video production, writing/journalism, graphic design, animation and finally photography (all have more than 10%). Some small categories with 1% are gaming, event planning and jewellery.
  • There is 50/50 split between those that have formally registered their business and those that haven’t. Of the non-registered ones, some can’t afford to lose some of their income in taxes while others do not see the benefit in registering a business, paying taxes, and accessing the supposed benefits that taxpayers enjoy, such as NHIF and NSSF.
  • 23% work in the sector part-time. Their other sources of income are teaching (7) and 4% each for farming and events equipment rental.

Check it out the full report here.

Also, read more about ADMF, and its sister institution, the Africa Digital Media Institute (ADMI). Some of the courses open for enrollment in 2021 including certificates in video game development, music production, video production, digital marketing, and Rubika 2D animation as well as diplomas in Rubika video game design, sound engineering, animation & motion graphics and film & television production.