NAIROBI, Kenya, Feb 26 – The government has pledged to support Kenya Post Office Savings Bank, in its restructuring efforts that are geared towards enabling it effectively compete in the financial services sector.
Finance Permanent Secretary Joseph Kinyua hinted on Thursday that the government would soon give Postbank the approvals it requires to undertake the necessary reforms this year to enable it contribute towards the achievement of long term development goals.
“We need to strategically position Postbank to play its critical role in mobilising the investible resources we need to achieve our objectives under Vision 2030,” he said through his Financial Secretary Mutua Kilaka – in reference to the need to increase national savings from the current 12 percent to 30 percent in the next 20 years.
The bank has been eyeing the foreign exchange business as well as lending to its customers since the Treasury made amendments in the Banking Act, a move that would enable it to become a major player in the sector.
For this to happen however, Parliament has to pass the 2009/2010 Finance Bill to give them the go-ahead. Currently, the law restricts the bank to offer savings products only.
“It is the desire of the Postbank to be allowed to extend credits to its clients. We are hopeful that this will be undertaken this year,” the PS added.
He however lauded the savings bank for its effort to increase financial access to rural areas through the introduction of innovative products and services. Besides installing an Information and Communication Technology platform which has seen the introduction of paperless banking, the bank has been partnering with agents in remote areas which have helped to bring more Kenyans into the formal banking sector.
The official spoke during the launch of the bank’s Rapid Results Initiative approach through which it hopes to grow its revenues and profitability by 10 percent and 25 percent respectively in the next 100 days.
The ambitious plans are outlined in five thematic areas including business growth, restructuring, enhancing corporate image and their productivity and aim to position the bank to play a pivotal role in the deepening of the financial sector.
“The bank has adopted the RRIs with a renewed desire to achieve results for all bank’s shareholders. Postbank is dedicated to produce these results for all Kenyans in all its operations,” said Managing Director Nyambura Koigi.
Closely linked with the Economic Recovery Strategy for Wealth and Employment creation, the RRI was introduced by the government six years ago and is designed to deliver tangible results in service delivery to Kenyans.
The approach has been applied in over 50 public sector institutions such as ministries, departments and agencies where significant service delivery improvement has been registered.