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Kenya : DEAL to boost financial services signed by Kenyan banking institutions

May 24, 2014

An agreement that will increase access to financial services in the country is signed by the National Bank of Kenya (NBK), Post Bank and Kenswitch, the national payments switch provider.

NBK MD Munir Sheikh Ahmed stated that under the agreement all his bank customers will have access to 1, 200 Kenswitch ATM s services across east and central Africa.

He said, The deal will also reduce the cost of banking services through sharing of infrastructure. The pact hopes to leverage technology so as reduce the number of Kenyans that are excluded from formal financial services .

Ahmed added that there is a limitation on how much money the firm can spend on infrastructure.

Ahmed said, Instead of spending on physical infrastructure, we will pay commissions to our partners in order for our customers to have access to us . We are now able to have presence even in areas that it does not make economic sense .

Infrastructure investments remain one of the biggest costs for the financial institution.

National Bank has previously spent 23 million U.S. dollars to upgrade its software.

The bank at present has 70 branches and 110 agents.

The deal now takes National Bank cash access points in the region to 1,069 agents and 1317 ATMs. Ahmed said, In the short term we plan to grow our network even further so that by the end of next quarter to have over 80 branches .

He said, We have an ambitious plant to have over 120 branches and 5,000 agents in the next five years .

He said, However, in order to attract more clients we need to have our own outlets as agents only offer limited services such as depositing and withdrawing .

Ahmed mentioned that the agreement is in tandem with the bank s growth strategy of achieving tier one bank status by end of 2017.

Post Bank Managing Director Dr Nyambura Kiogi said that the tripartite deal is a union of technology that provides more customers, access to financial services.

She added that Kenya s financial sector is undergoing changes thus creating the need for alternative delivery channels to promote easy access to financial services.

She said, It will allow National Bank to use our extensive network at uniform and affordable rates . The bank offers instant money transfer of up to 11,300 U.S. dollars.

Koigi said, One of our mandates is to mobilize funds in Kenya by inculcating a savings of culture. This will assist the country to reach it national development blue print as outlined in the Vision 2030 .

Post Bank maintains 99 branches and 800 agents. He said, We hope to have at least 1,000 agents by the end of the year .

She mentioned that dynamism in the banking sector has allowed for innovation and collaborations as banks seek ways to meet the needs of different market segments.

She said that the agreement will push the total banks using Post Bank s platform to seven.

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Source: TendersInfo (India)

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