A Kenyan living in Zambia, Mozambique, Ethiopia or the Democratic Republic of Congo (DRC) would be able to easily transact banking business from their favorite home-grown banks as the east African nation’s top financial institutions go for the regional markets.
The customers would be able to make deposit or withdraw cash, remit cash back home and access mobile banking services affordably and just as easy as they do while at home, thanks to an ongoing expansion drive by banks in the east African nation.
Top Kenyan banks, namely Equity Group and Kenya Commercial Bank (KCB) Group, after conquering the Kenyan market, and extending to the larger East African Community countries, are now following in the footsteps of their South African and West African peers, which have branches in various African countries.
KCB Group on May 7 announced that it is in buyout talks with a bank in the DRC as it seeks to enter the market.
The bank had earlier declared that it is in talks with authorities in Ethiopia to enter the market and it is also eyeing Somalia.
KCB chief executive Joshua Oigara said, once completed, the new branches would facilitate deals in syndicated lending and trade finance.
“Ethiopia is a restricted market but there are reforms going on. We are optimistic they will allow Kenyan banks,” said Oigara.
By eyeing DRC, KCB is following in the footsteps of its rival Equity Group which already operates in the market, having entered some two years ago by buying a lender.
Similarly, Equity Group on May 1 announced plans to enter the Mozambique and Zambian markets in a deal with London Stock Exchange-listed banking group, Atlas Mara.
Equity Group chief executive said the buyouts would help them build economies of scale and make it a Pan African bank.
The expansion puts Kenyan banks in direct competition with South African lenders like Stanbic and Nigeria’s Ecobank, all which are operating currently in east Africa’s biggest economy and other nations in the continent.
Kenya has aggressively sought to bolster ties with Ethiopia ever since Premier Abiy Ahmed took over and started reforms.
President Uhuru Kenyatta in March led a delegation into the country seeking to enhance economic partnership with Ethiopia, with a focus on trade and investment.
Besides banks, Kenya’s leading telecom Safaricom is also eyeing the Ethiopian market.
The expansion drive would see the Kenyan banks “significantly increase size, placing them in a position to leverage on economies of scale in the rollout of their digital platforms in the region,” noted Cytonn, a Nairobi-based investment firm on Monday.
Kenya’s trade with several African counties is on the rise, one of the reasons analysts said, is making the banks go continental.
Ernest Manuyo, a business management lecturer at Pioneer Institute in Nairobi, noted that the expansion drive is in line with Africa’s one-continent dream and the soaring trade puts Kenya banks at a pole position to settle financial deals across the region.
However, the Kenyan banks are not only eyeing the continental market, KCB is also working on plans to open a representative office in China as it seeks to reap from the growing trade between the Asian nation and Africa. Enditem