Profit may be the main focus for the immediate survival of a business, but it is not the only thing that leads to the attainment of long-term success, banks and other financial institutions have been told.
This came out during a conference of bankers organised by the Kenya Bankers Association (KBA) to launch the Sustainable Financial Initiative (SFI). The association believes the SFI will help banks and other financial institutions balance their immediate business goals with the economy’s future priorities and socio-environmental concerns.
KCB CEO and chairman of KBA, Joshua Oigara, said the principle of sustainability is not new to Kenyan banks, but its application has been disparate, unco-ordinated and largely at the level of individual institutions.
Leadership and governance
Central Bank of Kenya Governor Patrick Njoroge, who officially launched the initiative, said: “This [sustainability] is not just a simple thing. The benefits of it will not be coming down this year or in two years. They will be coming down in the medium term, generations after us.
“The bottom line is not everything; the social responsibilities that banks and financial institutions hold are also very important.”
Mr Oigara added that it was time for financial institutions to change the public’s perception that all they care about is taking, not giving.
“Pushing profits alone can never be an imperative for business. If you are in the business just to make profit, I think that business will not succeed,” he said.
The SFI has three main priorities — equipping the financial services sector to perform optimally in the area of comprehensive risk management; enhancing business practice, leadership and governance; and promoting industry growth and development by fostering a culture of innovation and inclusivity enabled by new technology.
Kenya follows in the footsteps of other countries, including Nigeria, India and South Africa, that have had initiatives either spearheaded by regulators or banks to promote sustainable development.
KBA CEO Habil Olaka said the sector would be starting with self-regulation, and if this does not work, then it would bring in the regulator.