NAIROBI, Kenya, Sep 22 – After the successful Sh12.5 billion Rights Issue, the Kenya Commercial Bank (KCB) Group has disclosed that it will use part of its proceeds to improve customer service and productivity.
Chairman Peter Muthoka however reiterated that a huge chunk of the funds would go towards the intended purpose of growing their mortgage book.
“Those funds that we have now are going to help us improve on our prudential ratios. We are going to rehabilitate the bank in such a way that we improve the customer service but a lot of these funds are going to mortgage development,” he told Capital Business.
Last year, the group merged the operations of its subsidiary S&L with those of the bank in a move that was designed to improve its competitiveness in the mortgage industry by giving the division access to KCB’s wide branch-network across the region.
With the growth of its mortgage books, the group can now lend money for more than 25 years and also bring to the fold people who are excluded from the formal financial system as well as those in the Small and Medium Enterprises sector.
The growing demand for housing, estimated at 150,000 units per year has seen many commercial banks seek additional funds to lend to potential home owners. On Monday, Housing Finance issued a Sh5 billion bond which will enable it offer affordable credit to their clients.
But even with the seemingly increased competition in the provision of mortgages, Mr Muthoka said all the players in the business need to complement each other to ensure decent housing for all East Africans.
“These people in the field, we like to say they are not competitors but we complement each other because the demand for houses is big and we feel that we all have a big role to play,” he pointed out.
The chairman spoke after he presented a Sh1 million cheque to the National Museum of Kenya (NMK) for paving the Lamu Seafront Promenade in a gesture meant to reaffirm the group’s commitment towards the preservation of Kenya’s national heritage and culture.
“We want to associate ourselves with the social and economic development of this country and one area which is normally overlooked is the cultural development. We in KCB attach a lot of importance to our heritage,” he said.
Although Lamu was declared a national monument in 1980 and enlisted in the World Heritage List by UNESCO in 2001, the coastal town’s physical infrastructure has deteriorated over the years.
The refurbishment of the five kilometer water front which serves as a gateway into the Old Town is expected to cost an estimated Sh40 million, an amount that the Museum could not raise by its own and thus its appeal for assistance.
NMK Chairman Issa Timamy said so far, they had collected Sh10 million and was hopeful that they would be able to complete the project by the first quarter of next year subject however to the availability of funds. Once this was done, Mr Timamy said it would boost tourism in the area and other business activities.