Unaitas Sacco drops its bank dream on CBK licence freeze

A Unaitas Sacco branch in Nakuru. FILE PHOTO | NMG 

By PATRICK ALUSHULA
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Summary

• The sacco dropped this from its 2019/2023 strategic plan despite saying that it had invested in processes and systems to match banking requirements.
• It had initially set 2018 as the deadline of converting into a bank.
• CBK put a moratorium on licensing new commercial banks in November 2015 days after Dubai Bank and Imperial Bank sank into receivership.

Unaitas Sacco has dropped bid to convert into a bank, citing a Central Bank of Kenya (CBK) moratorium order as well as the need to grow further.

The sacco dropped this from its 2019/2023 strategic plan despite saying that it had invested in processes and systems to match banking requirements. It had initially set 2018 as the deadline of converting into a bank.

“We invested in processes and systems to be able to take us into a bank. But in between the moratorium came and then then the Cooperative policy 2019 came. Within the current strategy, our main objective is growth,” said CEO Martin Muhoho in an interview.

CBK put a moratorium on licensing new commercial banks in November 2015 days after Dubai Bank and Imperial Bank sank into receivership.

The regulator is yet to lift the suspension, which it said was necessary in strengthening oversight in the sector before admitting new players.

 

Unaitas boss says that the sacco is targeting to increase membership from 300,000 to 750,000 and raise asset base from current Sh13 billion to 32 billion in the next five years.

Mr Muhoho says the focus will be to deliver on customer demands as well as maintain dividend payout between seven and 10 percent.

“We believe that if we are able to offer a return on investment to our shareholders and offer quality service and convenience to members, they will be happy with Unaitas in its current form,” he said.

Access Bank, SBM Bank, Bank M of Tanzania, Guaranty Bank have all entered Kenya through acquiring existing local banks.

The central bank announced the acquisition of Transnational Bank by Access Bank from February 1, 2020.

Access Bank CEO Herbert Wigwe said in a transcript call that acquiring Transnational Bank was the only quick way in.

“Now, if you understand how that market is configured today, getting an existing licence would have taken a lot longer,” he said.