It started with the council of governors of Western Kenya and has morphed into Governors from different parts of the countries seeking go start banks to help their populace. it makes considering the huge amounts that the devolved units and their administrators deal with. The most recent occurrence of that character was when Charity Ngilu (Kitui), Alfred Mutua (Machakos) and Kivutha Kibwana (Makueni) said they were grouping under the South Eastern Kenya Economic bloc (SEKEB) to broaden, deepen and accelerate socio-economic development, employment and wealth creation for the people in the region and the country.
Speaking in Kitui, the governors said the overriding concept of the SEKEB bloc, that has remained moribund since March 2016, is intended to pool and leverage on regional resources, county synergies and economies of scale in order to spur trade and investment in the region. They agreed that the three counties shared equal and similar challenges and, therefore a common financial institution was appropriate for the semi-arid region to salvage the residents by offering cheap credit.
“This is a non-political entity and we want to create markets for our goods and enhance value addition for our products and ensure food security through revamped agriculture. The objective of the inaugural forum is to share the SEKEB concept and objectives with the leadership, business community and professionals,” said Ngilu. She said the economic bloc seeks to solve unique challenges facing residents in the three counties adding that they will form a financial institution because “we have the resources but have continued to use institutions that do not appreciate the unique challenges of our people.”
Mutua said among the biggest challenges was the erratic rainfall patterns which resulted to unpredictable harvest. He said the three counties had the basic factors required for production including land, capital, labour and technology. “We want to call upon all leaders, churches and professionals to join the initiative without minding their faith and parties of affiliation. We want to speak in one voice as Kamba community,” said Mutua. Prof Kibwana said the three counties made the agreement because they have much in common.
This is comes hot off the heels of a similar initiative amongst Western Kenya Governors. A section of governors have sought the services of US-based company to help them start an investment bank for 11 counties in western Kenya. The county bosses want financial and human resource consultancy firm, Deloitte Touche, to suggest structures and an implementation programme for the institution. Kisumu governor Jack Ranguma the a local daily that each of the counties would deposit Sh100 million to kick off the project. He said the bank will lend to the counties, encourage deposits from the diaspora community, ease access to loans and stem exploitation by commercial banks. According to Mr Ranguma, counties whose allocation may be delayed by the Treasury will be able to borrow money from the common bank.
“Our intention of coming up with a western economic bloc and specifically a common bank is to help mainstream the people. Without a bank, you cannot achieve any economic prospects,” said Mr Ranguma. The counties that have so far expressed interest include Kisumu, Siaya, Homabay, Kisii, Nyamira, Migori, Bungoma, Kakamega, Vihiga, Busia. The 11th county is yet to be incorporated since three counties had also expressed their interest. They include Bomet, Nandi and Kericho.
However, Mr Ranguma said priority may be given Kericho because of its proximity to the Western Kenya region. Nyamira Governor John Nyagarama said through the regional bank, the counties will be able save a lot of money from the diaspora and locally. “A lot of money from diaspora goes to commercial financial institutions and as a result, county residents don’t benefit from this money directly,” Mr Nyagarama said. He added that with the regional bank in place, there will be more jobs and economic growth for all the counties on board.
Vihiga Governor Moses Akaranga said the move will ensure all the locals access loans. “The existing banks have given many restrictions that have made our people shy away from applying for loans,” said Mr Akaranga. He said the institution will offer the local people soft loans that they can use to start businesses. Efforts to acquire a specialised bank for western Kenya has taken a new turn after the 14-county bloc kicked off the search for a new consultant to lead the process. The consultant is expected to oversee the acquisition of a “suitable bank in a timely manner”, the secretariat running the Lake Region Economic Bloc said. Interim chief executive Abala Wanga said the bloc has set its eyes on any of the stable lenders or financial institutions but will seek professional advice on the best option. “The bank we want to have is just like any other commercial bank, which is successful and with headquarters in Nairobi,” he said.
Some internal analysts say that the bloc was initially keen on acquiring a controlling stake in any of the undercapitalised State-owned banks to finance the region’s projects but their current adviser, former KCB Group chief executive Martin Oduor-Otieno was cautious. The decision to look for a new consultant implies that the group favours a risk-taker who will speed up the process even as Mr Wanga maintained that Mr Oduor-Otieno is eligible to reapply. “What we want to do is identify a really prudently-managed bank that we can have to run as a development and commercial financial institution,” he said. The bloc decided to acquire an existing bank to avoid the lengthy regulatory path of starting a new one from the scratch. The adviser is expected to determine the kind of shareholding or board membership the prospective bank should have — assuming the bloc buys it — and the branch network involved.