KCB Group, a regional bank based in Kenya has embarked on the expansion of its financial services, a senior bank executive told Xinhua in a recent interview.
Among the services targeted in the expansion drive is to export finance products for small and medium enterprises in new markets such as Somalia, Ethiopia and Burundi, to spur the bank's regional expansion drive.
"We need to export our way out as an effective approach to dealing with current challenges. We believe the Small and Medium Enterprises (SMEs) can lead us in this direction," said George Mutiga, Head of Trade Finance and Financial Institutions at the Nairobi-based KCB Kenya.
Part of KCB's efforts to promote the export sector includes an allocation of 350 million U.S. dollars set aside by the bank in September for lending toward agriculture.
The lending facility is meant to promote investors to access agricultural machinery and other farm inputs.
Mutiga said the bank has embarked on a plan to expand the services to clients who depend on the bank to conduct their trade services. This is done through the designation of trade specialists to advise customers on trade transactions. Mutiga said the department of trade finance offers guidance on structure of trade finance.
The KCB Group, which owns banks operating in Eastern Africa, plans to enter Somalia by December, Mutiga said.
"We are looking at Somalia as a market for our export financing soon. The expansion to Somalia will be done within the timeline," Mutiga added.
According to the Kenyan banker, the bank is currently working on obtaining a banking license from the Somali government once the terms for the issuance of the license have been met.
Mutiga said the bank is relying on the growth of key financial services, including export finance, letters of credit and pre-shipment services to effectively grow its share of elite financial services to its clients in the new markets.
The bank has already opened a representative office in Ethiopia to realize its pan-African dreams.
"The expansion into Somalia might be through a representative office for the start. At the moment, we are conducting risk and compliance analysis to ensure that our operations in Somalia do not break any U.N. embargoes in place," Mutiga said.
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