Interesting Times As Teachers Go Into Banking
The last couple of months have seen rather discouraging times in our banking sector, with the collapse of Dubai Bank and Imperial Bank, and most recently Chase Bank which is in receivership under the management of KCB. However, it is heartening to see aggressive moves in the market, like the recent launch of Spire Bank. Inspired by the word “Inspire” , Spire Bank says it is here to “INSPIRE us to do more”. Quite boldly so!
Spire Bank is 75% owned by Kenya’s Mwalimu SACCO, which is Africa’s Largest Savings & Credit Cooperative Organisation (SACCO) which has an asset base in excess of Ksh 33 billion, over Ksh 5.3 Billion in reserves and over 70,000 members who include employees of the Teachers’ Service Commission in post primary institutions, TSC secretariat and Mwalimu SACCO staff.
Since the mid-1990s, teachers relied on their SACCOs for most of their banking (FOSA) and credit facilities. The growth of SACCOs was spurred by an interesting move in the early 90s, where the big banks changed their banking rules, kicking out low income members. I remember our mother (a teacher) having to close her account and our kids’ accounts at one of the big banks because our balances did not meet the newly set threshold to bank with that particular bank. So teachers formed and grew their SACCOs, and it is interesting that now, they are going into the market with a bank of their own.
According to Tim Gitonga Spire Bank’s CEO, ” “Spire Bank is a fresh brand with renewed energy and motivation for growth. Spire Bank reflects the bank’s ambition to simplify processes, improve branch productivity and provide best-in-class service to its customers,”
Their first area of focus is upgrading their IT system to serve their customers better, and an aggressive push for insurance business.
Even as the push towards consolidation gains steam, I still feel there is room for banks that are willing to do things differently, and to reach under-banked/un-banked Kenyans at prices they can afford, and I hope Spire bank will not go for the default middle market segment that already is spoilt for choice, but instead will make some boldly inspiring moves.
