NCBA At The Forefront Of Kenyan Finance’s Future
Following the game changing merger of CBA and NIC, the result — NCBA — finds itself being one of the most influential forces in Kenya’s economy. Having come out strong from the initial economic shockwave of the pandemic, they are now looking to push forward their fintech division, as well as open up their fintech expertise and influence in other parts of the continent.
On October 1st, 2019, Kenya’s central bank — CBA, and NIC Group merged, bringing together 110 years of experience and forming what is now not only one of Kenya’s biggest financial institutions, but one of Africa’s, with 26 million customers in its native Kenya, and 60 million more across Africa. Specializing in corporate banking, asset finance and digital banking, NCBA’s stability is reflected in their continued growth in 2020 ($4 million+) despite the negative global economic impact of the COVID-19 pandemic. They also saw significant gains in assets under management and rental revenue. The second quarter of 2021’s results show a continuation of this promise with a 90% profitability growth compared to the similar period las year.
John Gachora, NCBA Managing Director highlights the trust-factor as being central to this success, with NIC and CBA being well-established and respected separate entities prior to the merger. On top of this element of trust, he adds that NCBA truly shines when it comes to a balance in ability between international and domestic business. He puts forward that the bank possesses a profound understanding of the local market whilst simultaneously being strongly connected to global currencies and markets. As for how NCBA have come out on the other side of the pandemic’s initial blow in 2020, the last year and a half marks a before and after for Gachora when it comes to the public perception of the banking industry. Gachora says “before the pandemic hit, banks were hated so much that we used to be compared to politicians. But during the pandemic actually a net promoter view from the public rated banks the most understanding of the various industries.” Indeed, this is unsurprising given that in Kenya for example, the banking industry’s centrality to softening the overall blow on the economy, providing over 54% of the loans.
Gachora himself comes from humble beginnings, the eighth of thirteen children, born in a village of Kenya’s Central Province, and now sits in one of the hottest seats in the African financial landscape. He draws on an eclectic academic background, having studied business but also engineering (MIT). Afterwards he moved onto a prestigious professional track record, working with the likes of Credit Suisse and the Bank of America. When talking about his own leadership style, he identifies the U.S influence of his experience in the states as being a key contributor — “I manage people through inspiring them and that is perhaps an American culture more than anywhere else.” Culture is imperative to Gachora, who is aware of typical criticisms levelled at both private and public sector in Africa — “There's too much talk out there about Africa and corruption.” Following on from this idea he states that “good governance and integrity” is a big part of what his leadership brings, adding that he “insists” that this integrity dictates “the way we run NCBA, the decisions we make, the policies in place, our own governance.”
Where does the future lie for institutions like NCBA? For Gachora the answer is clear cut as he declares “I have always believed that Fin Techs and banks will converge at some point.” To this end, NCBA have firstly, set up their own FinTech — BanqTech — to continue exploring this ever-growing, and increasingly indispensable division. Secondly, they have forged multiple partnerships to continue expanding their knowledge and involvement in FinTech across Africa. The principal partnership in this case is with MTN of South Africa, which has allowed them to roll out products in Uganda, Tanzania and Ivory Coast.
“before the pandemic hit, banks were hated so much that we used to be compared to politicians. But during the pandemic actually a net promoter view from the public rated banks the most understanding of the various industries.”
In looking for a natural hub for FinTech in Africa, Gachora says that there are certain advantages that Kenya has, which will help the industry to flourish in the coming years. “Fantastic human capital”, strong adoption of technology and a young population are all facilitating the transition of digital banking and brightening the future of the Kenyan FinTech sector.
With the now blended talent pools of CBA and NIC, and current figures remaining positive in the wake of the pandemic, NCBA’s momentum continues to look promising as the merger approaches the two-year mark. For those in any way deterred by stereotypical obstacles that have faced Africa in the past, the focus on a new culture of integrity and good governance at NCBA being fronted by Gachora is worth bearing in mind, as is his summary of the Kenyan business landscape. In addition to the “abundant” human capital, the young population, a government that provides an “enabling business environment”, and the increasing ease with which new technologies are adopted,