In our “5 Questions” series, we ask partners in the AFTS ecosystem to share about their work and unique perspective on fintech. This “5 Questions” interview is with Joshua Oigara, the CEO & MD of KCB Group, which is a sponsor of the AFTS Addis Ababa event.
Briefly, what is the scope of KCB Group’s work?
Our customers are the pillar that has propelled us to become the biggest bank in the region. That is why we have purposed to refocus our efforts in ensuring that we not only retain our customers, but we expand the customer base by engaging them with a bouquet of products that suits their needs. Our focus is to proactively support our customers to be where growth is, enabling businesses to thrive and economies across the East African region to prosper, and ultimately helping people to fulfill their hopes and realise their financial and investment ambitions. KCB Group Plc is East Africa’s largest commercial Bank that was established in 1896 in Kenya. Over the years, the Bank has grown and spread its wings into Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia (Rep). Further to the banking businesses in these markets, KCB Group has added to its Kenyan banking subsidiaries National Bank of Kenya, a listed lender. Today, KCB Group Plc has the largest branch network in the region with 330 branches, 1,076 ATMs and over 18,818 merchants and agents offering banking services on a 24/7 basis in East Africa. Additionally, KCB Group owns KCB Insurance Agency, KCB Capital Limited, KCB Foundation and Kencom House Limited as non-banking businesses. This is complemented by mobile banking and internet banking services with 24-hour contact center services for our customers to get in touch with the Bank. The Bank has a wide network of correspondent relationships totaling over 200 banks across the globe and our customers are assured of a seamless facilitation of their international trade requirements wherever they are.
Tell us about your plans to enter the Ethiopian market. What are the unique challenges and opportunities in that market?
We are certainly excited by the possibilities that abound with the reforms that we can see in Ethiopia under the able leadership Prime Minister Abiy Ahmed – now the 2019 Nobel Peace Laureate.
The Ethiopian market bodes well for the future considering the growth rate within the market and the size of the addressable population. We are keeping a close eye on the discussion from the regulators and government agencies on the possibility of amending the laws to permit foreign banks to operate within the market.
We are optimistic that the financial regulations in Ethiopia will continue to evolve to deepen financial inclusion across the country. We are waiting for the pace of liberalization of financial services to increase in order for KCB to bring its signature banking services to Ethiopia as early as possible.
We are setting ourselves up to facilitate trade finance for our customers across the eastern Africa region. KCB has been gradually working on strengthening its capacity in Ethiopia with a focus on serving clients conducting business with Ethiopia from the Eastern Africa region both locals and other nationals. We now have a functional Rep office in Ethiopia and we are continually engaging the Ethiopian authorities on our operations. KCB remains open to partnerships opportunities as we seek a firmer grounding for our new business in Ethiopia. The Ethiopian financial services sector is one of the most promising but highly regulated in Africa.
How have you seen the relationship between fintech and banking evolve over your years of work in the space?
Digital disruption, and especially mobile technology in and around Africa, is significantly accelerating towards a revived fintech industry. For KCB, this presents an opportunity to transform and simplify how financial services are being offered. Our plan is to leverage the opportunity of all markets to meet the changing behavior and expectations of customers who are increasingly becoming used to the immediacy offered by technology. In 2015, we announced a partnership with Safaricom, which is a telco, to offer our customers a savings and loan product called KCB-MPESA. That partnership grew our customer base from four million to more than 12 million today. Our pride remains the traction the mobile lending channel has generated. Further, we will enhance the capacity of the platform to make payments. Partnerships are one of the keys to our future growth and deepening financial inclusion beyond the traditionally banked in order to reach those who have been excluded by brick and mortar banking. The average mobile loan that we lend in Kenya today is $50 with a repayment rate of 98 percent. It shows you how the models we use can work just fine, even for those who have no access to bank branches.
What are some recent fintech developments that you are interested in applying across your work?
From the traditional brick and mortar branches to convenience wherever and whenever you may need, we are tirelessly working on developing platforms that will serve our vast distribution of customers in entirety. We have rolled out different channels that ease access to banking services, without having to walk into a branch. The digital age has opened exciting possibilities that could not have been attained without the wonders of the latest technology. We have to stay at the cutting edge in order to deepen financial inclusion and sustainably create more value for our shareholders.
Why are you excited to partner with the Africa Fintech Summit in Addis Ababa?
This summit provides the right kind of energy that we need to drive the change that our African economies covet: driving change through technological revolution. Technology changes so fast that just a short decade ago, ATM was king. That has been largely supplanted by mobile. We need to be the change that our continent needs and Addis Ababa is a great host, first of all as the capital of Pan-Africanism, and secondly because the wind of change that is blowing throughout this land is palpable across the whole world. Of course, it’s exciting to be here at a time when Prime Minister Abiy is celebrating winning the Nobel Peace Prize in October. He’s done proud for the region and for Africa and its, therefore, a great time to be in Addis.