Kenya Commercial Bank Executive Director Mr Nok Bwondit speaks to The Independent's Patrick Kagenda about how it intends to use its 110-year experience in the region's banking sector to out-compete local players and other new entrants from West Africa and the Middle Eastern countries.
Why did it take KCB all that long to enter the regional banking industry?
KCB`s dream of entering into the region started in 1994 when we surveyed Uganda, Tanzania, Ethiopia and South Africa. Our potential was in the region, but Uganda had moratorium issues as a result of financial institutions that had collapsed. Bank of Uganda and the World Bank agreed to strengthen the economy before other banks could come in. However we kept surveying the market until November 2007 when we opened our first branch in Uganda. Meanwhile we were licensed in Tanzania in 1997 and have been operating there since that time. However in 2002 we re-branded to become KCB, and changed our vision to become the best bank in the region.
What's your interest in Uganda when its financial market is almost saturated with banks?
Uganda is a critical market to the region considering its location which gives it advantage to cover the great lakes region. Uganda is a transit corridor to five countries with Kenya being the sixth. This is enough reason for any serious investor in the financial industry to invest in Uganda. Uganda is the only entry point for the neighboring countries.
What does this mean?
We are now seeing peace, law and order returning to the region and as such Uganda is bound to become the regional financial centre. There are over 80 million people in the region which makes it a huge market.
Then why not concentrate in Uganda than criss cross to Rwanda, South Sudan and others?Â
Our vision is to have a regional presence. We can't leave the other countries because they need services. We are in South Sudan because there is a huge un-banked population and there is oil money which needs a reliable bank like KCB. The South Sudan economy is a cash economy which badly needs banking facilities. Ever since the signing of the Comprehensive Peace Agreement (CPA), we are the only commercial bank that is in the country and even the government of South Sudan banks with KCB.
But you are faced with competition from your own Kenya Equity Bank and others that are also eyeing the region.
KCB never fears competition considering the 110 years we have spent in the industry. In Kenya competition is stiff with 48 banks. Since we are not from a monopolistic environment, competition is healthy. We know the market than any other bank, we were in the region as National Grindlays Bank and we operated up to Zimbabwe.
What's special that you find on the Uganda banking industry?
Uganda is a market that lacks customer sensitive culture. Managers here are difficult to meet. KCB`s approach is to improve customer service where clients are free to meet managers. We need to listen to the clients because we believe a complaint is a complement. Secondly interest rates are high compared to other countries in the region. With the coming of other banks competition will cut the interest rates. Take this example, Kenya interest rates are 13-15%, Tanzania 15-20% and Uganda 18-22%. Our method is how we perceive the risk on the individual.
And what special facility are you bringing that is not in Uganda?
The special thing we are introducing is the one account working in all countries under one platform in the region. With your account in Uganda you can access money at KCB Tanzania or KCB Kenya or KCB South Sudan. With this we are the only bank that has an East African customer base.
What plans do you have for the region?
We have an expansion programme where we intend to add 50 branches to the existing 160 branches already in operation in the region. We have 35 branches for Kenya, eight for Uganda, two for Rwanda and the rest for Tanzania and South Sudan.