Corporates use such initiatives to hook up existing customers to their brands

Safaricom Director Consumer Business, Sylvia Mulinge (left) and Standard Group Managing Director for Broadcast, Joe Munene celebrate the launch of the Blaze BYOB Tv Show Season 2 at Safaricom House.[Elvis Ogina.Standard]

Kenyan organisations are increasingly sharing part of their huge profits with communities in a move aimed at improving the societies’ welfare as well as increasing their limelight

Their growing contribution in solving societal problems amid shrinking profits improves brand visibility.

For instance, Cynthia Odhiambo and Warren Demesi secured their places in university courtesy of Co-operative Bank Foundation scholarship.

While Cynthia, an orphan, is in her third year studying Bachelor of Medicine and Surgery degree, Warren is studying Actuarial Science.

“The scholarship has boosted my focus on studies and taken away worries about finances as it caters for fees, accommodation and meals. In addition, the vocational internship programme has given me workplace exposure,” says Warren from Nairobi’s Mathare slums.

Since their days in High School, their school fees have been paid for by Cooperative Bank.

Last year, the bank splashed Sh162 million to keep the scholarship drive alive, up from Sh154 million in the previous year. Co-operative Bank Group CEO Gideon Muriuki says the foundation has spent Sh1 billion ($9.9 million) on social investment since its inception in 2007.

“The over $9.9 million that the bank has expended on full education scholarships since inception is fully funded from our coffers,” says Muriuki.

The Equity Bank’s Wings to Fly Programme in partnership with The Master Foundation, UKAid, USAID among others, sponsors over 4,000 students from high school to university in addition to offering them employment.

Family Bank and the KCB Foundation also offers a similar scholarship to about 500 students. In February, Kenya Bankers Association (KBA) named Cooperative as the overall winner of the 2017 Sustainable Finance Catalyst Awards.

KCB and Equity came second and third respectively.

The trio has, apart from funding environmental projects, taken an active role in dedicating part of their profits to funding programmes in the multiple sectors such as education, agriculture, entrepreneurship, health, environment and innovation.  

Corporates use such initiatives to hook up existing customers to their brands as well as win the hearts of new customers.

For instance, Equity and Coop bank give internships to the students they sponsor, making them grow to become customers. Equity, in conjunction with Embassy of the Netherlands, has been running a three-year program dubbed ‘Agricultural entrepreneurship acceleration project’.

Through the project, farmers are taught on best practices to maximise returns.

This helps transform medium scale farmers into commercial farmers so as lower their risk of defaulting on debt. “We have trained them on safe practices and we want to bring on board 20,000 more medium-scale farmers to transform them into commercial farmers. We believe their risk of default will reduce,” said CEO James Mwangi.

According to KBA Chief Executive Habil Olaka, the award recognises institutions that practice sustainable finance by lending to projects which have a direct positive impact on the financial sector, the economy, the environment and the society at large. “We don’t just stress on economic viability but also consider the impact on the environment and social well-being of the society.

Sustainability stresses the ability to not just look at the profits but also the impact on the people and the planet,” said Olaka. While this practice is not purely a corporate social responsibility, Olaka says that it is an integrated approach to ensure that Sustainable Development Goals (SDGs) are realised.

In 2016, Equity Group disclosed in its annual report that in partnership with other partners, it had disbursed Sh22.85 billion in social impact programmes.

 

“2jiajiri” programme

In its sustainability report, KCB disclosed that in 2014, its Foundation had a budget of Sh201 million. This was increased to Sh272.8 million in 2015 and further to Sh315 million. This translates to year-on-year increase of over a third.

In March 2016, the foundation launched a Sh50 billion “2jiajiri” programme that funds skills development and job creation.

It supports the informal sector entrepreneurs and the youth through vocational training.

Standard Chartered Bank invests about Sh90 million annually to sponsor Stanchart Marathon while additional Sh60 million is raised through partners.

The funds are directed to the bank’s flagship project of ‘Seeing is Believing’ that focuses on addressing avoidable blindness among children below 15 years.

According to the bank’s CEO Lamin Manjang, between 2003 and December last year, $98.4 million (Sh9.94 billion) has been raised. “In conjunction with our implementing partners, we have restored sight for more than 10,000 children through corrective surgery since the inception of the programme,” says Manjang whose bank also runs projects in agriculture and sports.

Many institutions are alert on SDGs that stress on making the best use of the planet while ensuring that it is preserved for future generations.

According to Manjang, SDGs will drive domestic and international development policy over the next 15 years thereby affecting the business environment of the bank’s key markets.

“Our obligation is to carry out our business in a way which not only provides returns for our shareholders but also delivers good things for society: our clients, communities, and people,” Majang said. Away from the banking sector, firms in insurance, communication and investment are also increasing their expenditure on social programs.

Last year, Jubilee Insurance, more than doubled its expenditure on social programmes.

While in 2016 it had spent Sh8 million, last year, it spent Sh17.5 million. The insurer runs a children’s fund that is invested in health and education programmes for children.

“All our staff members contribute a day’s salary and the company matches this and also contributes a day’s profit. This goes into a fund that has trustees who are all staff members,” says the Chief Executive Patrick Tumbo.

Mr Tumbo says this strengthens the company’s brand since the projects help to bring out the human side of the firm.

East African’s most profitable firm, Safaricom also runs an array of projects through Safaricom and M-Pesa foundations. It has pumped billions in areas like arts and culture, disaster relief, environmental conservation, water, health and education.

The telco has partnered with over 1,200 organisations to reach more than four million Kenyans through social programmes.

Last year, donations to Safaricom Foundation alone amounted to Sh381 million, up from Sh414 million in 2016. Its 2017 sustainability report shows it recorded growth in the contributions made by the two foundations - from Sh3.6 billion to Sh6.6 billion.

Education and health had the highest growth.

According to our data covering 56 listed companies, only 11 companies, Safaricom included, managed a net profit above what Safaricom pumped into social programs in 2017.

When the telco launched the Blaze, with several offers targeting the youth, it pumped in Sh700 million to engage youth on mentorship programmes in busi-ness, agriculture, finance and creative arts.