Sidian Bank of Kenya Plans Technology Roll Out for Expansion

  • Small-loans lender to roll out mobile applications this month
  • Bank plans to more than triple its customer numbers by 2021

Sidian Bank of Kenya, a unit of Centum Investment Co., plans to use mobile-banking platforms to expand its customer base and become one of the country’s biggest lenders by 2021, Chief Executive Officer Titus Karanja said.

The Nairobi-based lender that recently changed its name from K-Rep Bank is already working with small technology startup companies to roll out innovative and low-cost mobile-phone applications, he said.

“We have confirmed three startups who are ready right now to go to market,” Karanja said, adding that the partnerships will be on a revenue-sharing basis. “We are just completing the legal process. Another eight are at various stages of testing.” 

Sidian Bank, which is ranked as a third tier lender, plans to more than triple its customer base to 12.5 million from 325,000 within the next five years. The company reported full year profit of 372 million shillings ($3.67 million) in 2015, compared with 514 million shillings a year earlier after it increased provisions for bad loans.

The Central Bank of Kenya classifies lenders into three tiers based on assets, customer deposits, capital and reserves. With 42 commercial banks in a nation of 44 million people, Kenya’s Treasury says the banking industry is ripe for consolidation as 70 percent of business done by just eight lenders.

Kenya’s biggest publicly traded investments company Centum, which controls 67.5 percent of Sidian, injected 1.2 billion shillings ($11.8 million) in a rights issue to raise the small lender’s core capital to 3.8 billion shillings. Other shareholders are expected to put in another 400 million shillings by the end of May.

“Although there are many banks in the market, there are still a lot of undeserved pockets,” James Mworia, Sidian’s chairman and CEO at Centum, said in an interview. “Capital will not be an issue, expansion should not be a challenge.”

Centum, which was established by Kenya’s government to promote industrial and commercial development, plans to grow assets to 120 billion shillings by 2019 from about 46 billion shillings.

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