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Kenya

Postbank privatisation to boost savings

NAIROBI, Kenya Mar 3 – The Ministry of Finance expects the recent privatisation of Postbank to increase domestic saving to 30 percent of GDP from the current 17 percent.

The Treasury plans to re-position the bank to play a more significant role in mobilising the investible resources to spur economic development.

Ministry of Finance Permanent Secretary Joseph Kinyua on Thursday said the privatisation of the bank would jumpstart major organisational change to boost its capacity to compete proactively in the financial services sector.

"The government initiated the privatisation process to make Post Bank more effective. We now want to align it in such a way that it becomes a competitive financial institution in the country," Mr Kinyua said.

With the privatisation of Postbank, a subsidiary of the Postal Corporation of Kenya, it will be licensed and regulated by the Central Bank under the Banking Act and converted to a limited liability company. The government agreed to transfer 44 percent of its ownership in the bank to the Postal Corporation of Kenya.

In the 2009/2010 Finance Bill Finance Minister Uhuru Kenyatta announced that Postbank would be able to deal in forex, which saw the bank engage in discussions with relevant government departments to expand its mandate to offer credit facilities.

Mr Kinyua said the bank would now be more effective in offering loans and credit facilities to low-income earners and micro-enterprises.

"We are hoping to have this reform during the course of this year, to position the bank to effectively contribute to Vision 2030," Mr Kinyua said.

He was speaking during the launch of Postbank\’s third wave of the rapid results initiative (RRI).

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Postbank Managing Director Nyambura Koigi said the third phase would see the bank to roll out modern financial services pegged on convenience and innovation.

"We are re-inventing ourselves to keep pace with changing market dynamics to offer competitive financial services," Ms Koigi said.

Ms Koigi said the bank would be looking to grow its branch network to 102 from the current 91 branches. The bank will also be seeking to increase its number of accounts to 114,000 by the end of the year.

With the conversion into a limited liability company, Postbank will also be able to use post office outlets across the country to offer its services.

"This will give us greater access to the rural areas where financial services are still limited," Ms Koigi said.

Through the third cycle of RRIs, the bank will maintain its focus on business growth and optimal utilization of its assets to foster financial literacy.

Follow the author at https://twitter.com/MjKaranja
 

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