Source - Business Daily
Commercial banks are on an expansion spree, which will rub MFIs the wrong way.April 24, 2008: The Kenyan media has recently been awash with branch expansion news from the banking sector. Some of the eye grabbing headlines include: “Equity Bank set to open 18 branches across Kenya, Barclays Bank rolls out seven branches in a period of one year, KCB will open 60 branches across the region- 30 of the branches will be in Kenya, Family Bank to roll out six branches, Co-operative Bank to open 20 more branches.”
This is real! and shows the level of enthusiasm and confidence the financial services sector has in the Kenyan economy. The “open new branch” obsession is informed by “the catch-up” strategy, enactment of the Microfinance Bill and the business realities of our times. Globally, research suggest working with the economically active low income persons and giving them a hand as they fight their poverty, is profitable.
The strategy is confirmed by Compartamos (albeit pricing issues) bank in Mexico and our very own Equity Bank. The bank, has within a short time joined the big boys or the “ billion club” of banking in Kenya with its unique downscaling business model that caters for the low end, making money with them and from them.
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2 comments:
Charles - the mfi as you have said have to change tact. Its tough out there, they got to get tough too.
Charles,
I bet the future for microfinance is to join ranks with banks. They definetely have got to partner. I dont see MFIs in 2020. I see banks with microfinance windows.
Luke
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