Jamii Bora Bank has announced that it is now targeting Small and Medium Enterprises (SMEs), in major change of strategy that has seen it shed the microfinance tag.
The shift comes four years after the buyout of the lender once associated with social entrepreneur Ingrid Munro, whose focus was credit facilities to people in the informal sector such as kiosk operators commonly referred to as mama mbogas. Other investors have since come on board. They include private equity fund Catalyst that acquired minority stake last year.
Jamii Bora Bank Chief Executive Samuel Kimani said the re-positioning would enable the bank provide flexible, affordable and innovative products and services to this segment. "By repositioning ourselves as the enterprise bank, we are putting ourselves in a position to transform the way businesses obtain and consume banking and financial products and services," said Kimani.
The lowest income market segment presents the highest risk for lenders, mostly due to the irregular and unpredictable cash flows, and has long been shunned by the bigger and more established banks. Ms Munro, the founder, had in various occasions worked with women and youth groups from the slums in her vision to grant them banking services. The new owners however have a different vision for the small bank that is entering the space that several lenders have had their eyes on.
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Kimani said that the shift was informed by the changing consumer landscape which requires banks to align themselves in order to serve their clients more effectively. "SMEs are the key drivers of the Kenyan economy and by enabling them to access financial products and services we are ensuring that the bank realises growth in the key market segment."
To cater for the segment, the bank has introduced two business accounts - Business Bora Current Account and Business Bora Savings Account which Mr Kimani says are tailored to suit the needs of SMEs.
Several services on both accounts are offered at no cost, aimed at attracting customers to spur its growth. "These two accounts are trend-setting products that would boost businesses as they offer better terms than would be found elsewhere in the market," said Kimani after opening a new branch in Nakuru.
The new branch brings the bank's outlets to 24, serving more than 300,000 customers currently. The expansion saw the bank's net profit slump almost 80 per cent, but its chief executive expressed optimism about making a turnaround going forward.