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More Than 60,000 Bank Agents On Watch-list

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Bank agents exceeding 60, 000 in number have been added to a watch-list as possible channels for cleaning illegal money.

The agents, who transacted a total of Sh1.07 trillion in 2017, could easily be of help to dealers handling illegal cash outside the formal banking system and in the ongoing process of the withdrawal of old notes.

When speaking on Wednesday, KBA chairman Habil Olaka said that bankers have put in place a system that will flag unusual transactions at the agencies such as frequent small deposits from the same person and large daily trades.

“Agents, for example, have limits and range of transactions and any strange upsurges will definitely be flagged and monitored. We just want to be extra vigilant to ensure that the system is not used to clean dirty money,” said Mr. Olaka.

“We already have the necessary framework to check the inflow of such money but we are now being extra careful to ensure they are enforced without any slip-ups and without inconveniencing those making genuine transactions.”

Agency banking is becoming an increasingly popular trend among the country’s commercial banks with the aim of providing their services to formerly under-served areas and lowering costs by minimizing the number of customers who visit their branches.

Data from the Central Bank of Kenya (CBK) accentuates its popularity as transactions conducted hit record high values at Sh1.07 trillion in 2017, rising from Sh734 billion in 2016 and Sh152 billion in 2012.

Similarly, the number of agents rose from 23,477 in 2013 to 61,290 in 2017.

Bankers warn that the ongoing withdrawal of the old 1,000 note may be an uphill task, considering the fact that it accounts for 83 percent of the total currency in circulation and 40 percent of the cash being used.

Some of the hitches the banking lobby has identified to be expected are software upgrades to accommodate the new notes, the acquisition of new cash counting machines and the reconfiguration of automated teller machines (ATMs).

CBK approvals will be needed before authorization is given to individuals seeking to exchange more than Sh5 million shillings. According to rules provided by the bank, a basic assessment will be carried out on the source and ownership of the money.

The CBK, however, says that the people who fall under this category are few.

Those who don’t possess bank accounts and are also seeking to exchange at least Sh1 million will also need the central bank to approve the transaction.

In the case of those with less than Sh1 million to exchange, official identification will be required in order to deal at their bank’s branches if they have accounts or at the CBK if they do not.

The governor said that while the volume of illegal flows has yet to be quantified, the authorities have obtained enough evidence to force them into action.

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Banks

Stanbic Bank Half Years Profit Grows to Sh 4.1B

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Stanbic Bank has reported a 14 percent jump in profit after tax in Half Year results for the year ending June 30, 2019, majorly driven by loans and deposits.

The increase in profit has been attributed to increased lending to customers and efficiency.

During the same period, the bank’s loan portfolio grew by 19% to Sh161.9 billion from Sh136.5 recorded in the period ending June 30, 2018.

Subsequently, the firm’s customer deposits were up by 20 per cent closing at Sh201.6 billion from Sh167.3 billion in last year’s performance.

“The results are a reflection of the unstinting support we continue to get from our clients and partners, despite operating in what remains to be a challenging business environment,” said the company CEO Mr. Charles Mudiwa.

The bank attributes its growth to its change in the regulatory environment which affected both the insurance segment and banking.

“We have managed to navigate the complex operating environment by abiding to our strategy which remains pegged on income diversity and resilience,” adds Mr. Mudiwa.

Abraham Ongenge, the bank’s Chief Financial Officer notes that the bank has learnt how to deal with bad loans which have improved their shares.

“We are now more informed and are seeing efficiencies in credit scoring through new data on client behaviour,” he said.

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Gerald Warui Appointed As Equity Bank’s New Managing Director

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Equity Bank Kenya has appointed Gerald Warui as its fourth Managing Director pending approval by the Central Bank of Kenya. Warui is set to replace the outgoing Polycarp Igathe.

In a statement to the media, the Bank noted that “To ensure a smooth transition of operations Mr Igathe will hand over his duties to Mr Warui before his departure at the end of August,” read the statement.

“The appointment of Gerald Warui follows the board’s acceptance of the resignation of Polycarp Igathe who leaves the position at the end of August,’’ the statement added.

Igathe will leave the bank at the end of August to rejoin his previous employer, Vivo, to take up a newly created role of Executive Vice President of Sales and Marketing for Africa.

Mr. Warui, an insider who has served Equity bank for 21 years, is a career banker and has over 30 years’ experience in banking.

He holds an Executive Master of Business Administration degree from Jomo Kenyatta University of Agriculture and Technology (JKUAT) and is also a Certified Public Accountant CPA (K), and a graduate of Advanced Management Program offered by IESE Business School, Barcelona, Spain.

“The Board congratulates Mr. Warui on his appointment. The Board thanks Mr. Igathe for his dedicated and impactful service to Equity and wishes him well in his new role with one of the Equity’s most valued partners and look forward to deepening the existing relationship across the continent,” reads the statement from the bank.

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African Development Bank Approves $8M Loan to Credit Bank for SMEs

The objective of the facility is to provide access to finance to SMEs, the “missing middle” in Kenya, thereby reducing their financing gap.

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The African Development Bank Group board last Wednesday approved a $8m loan targetted financing to Kenya’s Credit Bank for lending exclusively to small and medium enterprises (SMEs).

The loan is set to mature with five years maturity with a two-year grace period. However, the interest rates was not discoled.

In a statement, AfDB said that the loans will be disbursed to Kenyan SMEs in construction, agriculture, renewable energy and manufacturing sectors.The loan will be used to finance businesses in construction, agriculture, renewable energy and manufacturing.

Credit Bank is a privately-owned commercial bank in Kenya. By end of 2018, the bank had a total assets of 17.81 billion Kenyan shillings ($173m dollars).

“It is financially sound and, as an adequately capitalized tier-3 financial institution, has a strong track record of SMEs, providing working capital and trade finance facilities. As such it is well-positioned to succeed in providing innovative longer term financial solutions to SMEs along several value chains including strategical financial solutions in Kenya,” Stefan Nalletanby, Bank Group director for financial sector development, told the Board.

The objective of the facility is to provide access to finance to SMEs, the “missing middle” in Kenya, thereby reducing their financing gap.

The facility’s proceeds will support transactions aimed at improving their productive capacities thereby enhancing entrepreneurship, job creation, income generation, and sustainable growth, leading to a multiplier effect on the country’s economic growth, according to the Bank.

Credit Bank joins the list of local lenders that are taking substantial loans from global funds such as the International Finance Corporation (IFC) and European Investment Bank, attracted by relatively more favourable terms of the debt, including lower interest rate and longer maturity.

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