Country FilesEast & HornCommercial Bank of Africa: Powered by the Kenyatta clan

Mon,22Oct2018

Posted on Thursday, 04 October 2018 12:18

Commercial Bank of Africa: Powered by the Kenyatta clan

By Morris Kiruga in Nairobi

Commercial Bank of Africa
Founded in 1962, Commercial Bank of Africa is Kenya’s largest privately owned commercial bank. It is a market leader in mobile lending, with more than 20 million customers on M-Shwari, the mobile-lending service it co-owns with telecoms giant Safaricom.

M-shwari was launched in January 2013 and had amassed 7.2 million customers by the end of 2014. The product combines the bank’s and the telco’s systems, giving customers access to banking services through a SIM-based application. Its success increased CBA’s net profit for 2016 by 87%. Meanwhile, many other banks are getting in on the action, which could lead to a price war on interest rates and transaction fees.

Lending to small businesses is one of CBA's main focuses. In October 2017, CBA signed a $90m loan from the African Development Bank to on-lend to Kenyan entrepreneurs. This year, it launched a programme with Ennovative Capital to meet the supply-chain needs of small and medium-sized enterprises (SMEs). The government's cap on interest rates has slowed the issuance of credit to the private sector, so there is a lot of demand from SMEs. On the other hand, the CBA warned in April that the government has been spending too much and that the current deficits would not be sustainable in the long term.

Originally owned by a consortium of investors, and then by Bank of America, CBA is now majority owned by the Kenyatta family through Enke Investments (24.9%). Other major shareholders include Ropat Nominees (22.5%) and Livingstone Registrars (19.9%).

CBA is also the only Kenyan lender with a foothold in West Africa after entering the Côte d'Ivoire market. In East Africa, CBA launched operations in Rwanda in March of this year after buying Crane Bank. CBA's current managing director, Isaac Awuondo, has more than 32 years of experience in the finance and banking sectors. He is also the chair of Kenya Airports Authority. M.K.

 

From the September 2018 print edition

 



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