Joshua Oigara - Afrikan Heroes

Kenya’s KCB Bank And Safaricom Launches $282m Stimulus Fund For Startups And Businesses

March 23, 2020

KCB Bank Kenya and Safaricom Plc. have committed to support customers in financial distress, making available more affordable lending and cutting transaction costs on mobile as part of the measures to assist as the country grapples with the effects of the Coronavirus pandemic.

“Our goal remains ensuring that our customers and our nation comes out of this storm strong together to continue the work of nation building. This is the time to stand shoulder to shoulder, to ensure that no one is left behind when this is all over,” KCB Group CEO and MD Joshua Oigara.

Here Is All You Need To Know

The deal between the two parties will see KCB Bank set aside Sh30 billion in a stimulus fund for onward lending to KCB M-PESA customers during the next 90 days.
The fund will allow for higher borrowing limits for qualifying customers and extended repayment periods for borrowers with existing facilities.
Other relief measures available to individual customers, and small business owners will include renegotiations of the loan contracts to either allow repayment moratoriums, or extending the repayment periods up to one year.
The Bank will foot the legal costs associated with the loan restructuring.

“We stand with Kenyans and all our customers at this time as our country and the world grapples with the pandemic. Our firm priority remains ensuring that our employees, customers, business partners and the entire population remains safe and free from the virus,” said Oigara.

“We have a role to continue supporting the economy and stimulating growth. The best remedy as our economy starts to slow down is to support our customers to get along with their lives, and to protect jobs by providing additional lending. We have been in crises before, but if we pull together, even in this environment, we will get the solutions Kenya needs” he added.

The bank and Safaricom will also open the door to customers who had been blacklisted at the Credit Reference Bureaus (CRBs) but have since cleared their facility. “We shall open credit limits to those customers who had been listed because of defaulting on small amounts, but who are now repaying their loans. Customers who need relief are advised to get in touch with us to work out the respective support areas,” said Oigara.
KCB has more than 22 million customers who borrowed Sh212 billion in 2019 on its KCB-MPESA mobile lending platform which is operated in partnership with Safaricom . These measures are additional to the zero-rating of bank to mobile and mobile to bank transactions in order to increase the usage of digital channels as opposed to cash in order to reduce the risk of transmitting the virus.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

Kenya ’s Largest Bank Enters Asian Market In A Deal With Japan’s SMBC

September 14, 2019

In this latest move, Kenya’s largest bank KCB will be looking to build one of the most significant banking bridges between Asia and Africa as well as position Kenya as a strong financial center in East Africa. KCB has just sealed a deal with the Sumitomo Mitsui Banking Corporation (SMBC), a multinational banking and financial services company in Tokyo, Japan aimed at driving cross-border trade between both countries. Kenya-based giant lender KCB hopes to be getting access to service clients in Japan through the agreement.

“We believe that new business opportunities will arise from the rapid economic development in Kenya and therefore seek to areas of mutual partnership to support such development, utilizing the product capabilities and global and local network of both banks,” KCB’s Group Director for Regional Businesses, Paul Russo said in a statement yesterday.

Here Is All You Need To Know

Under the deal, KCB will provide banking services such as banking accounts and cash management, trade finance, export credit agency finance, and treasury-related products to clients introduced to it by SMBC.
On the other hand, the deal will further strengthen SMBC’s coverage in Africa. According to the Managing Executive Officer & Head of EMEA Division at SMBC, Tetsuro Imaeda, cooperating with local financial institutions in Africa is “indispensable” for the giant Asian lender to expand its Africa business and responding to customer needs.

“By signing the agreement between one of our most important partners in Africa, KCB, SMBC will be able to support our client’s business to East Africa through (a) wide range of coverage of KCB in the areas and expects to further strengthen (the) existing strong relationship,” Imaeda added.

The pact between the two banks, reportedly the largest in their respective regions, was signed on the sidelines of the 7th annual SMBC Africa Summit held in Yokohama last week. It will see both lenders expand their financial offerings provided to clients in both East Africa and Japan, thereby enabling more cross border trade flows.

The Key Take-Away From This Agreement

For KCB, gaining such access to serve the Japanese market is a major step in its expansion drive. News of the partnership with SMBC comes just a week after the Central Bank of Kenya approved the takeover of state-owned National Bank of Kenya (NBK) by KCB Group.

Russo added KCB expects to “open up the East African market to the Asian market especially in the trade and motor vehicle industry.”

In a statement, the apex bank had said the acquisition will “strengthen both institutions leveraging on their respective well-established domestic and regional corporate, public sector and retail franchises.”

Partnering with SMBC now positions the bank for a major expansion of portfolio and an increase its global business operations, Russo added.

About KCB Group

KCB Group is a Kenyan non-operating holding company that owns banking subsidiaries in the East African region. In addition, the Group owns non-banking subsidiaries including KCB Insurance Agency, KCB Capital, and KCB Foundation. KCB Group oversees operations of KCB Bank Kenya Limited and all other subsidiaries

The bank works with several multinational companies in different industries and hopes to use the collaboration with SMBC to expand its play in facilitating business in Africa. Apart from Kenya, the lender currently has operations in Tanzania, South Sudan, Uganda, Rwanda, Burundi, with a representative office in Ethiopia.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.