Kenya's KCB signs up 1.8 million mobile banking customers

Mobile technology is seen by executives as the future of banking in the east African country. Other companies such as Equity Bank and Standard Chartered Kenya have invested in systems to let users access accounts any time.

The KCB M-Pesa service, operated jointly with telecoms operator Safaricom, allows users to deposit cash and borrow up to 1 million shillings ($10,400) for a period of up to six months via mobile devices.

"KCB has been able to increase its retail footprint by opening over 1.8 million new accounts," Lawrence Kimathi, the newly appointed CFO said in an interview on Thursday.

KCB has lent more than 1.37 billion shillings to more than 400,000 borrowers on KCB M-Pesa, he said, adding the service was on course to hit a target of 10 million users within a year.

Chief Executive Joshua Oigara said in March he expected KCB M-Pesa to grow to account for 20-30 percent of its lending, although he did not give a timeframe.

Analysts say the bank has secured a swift take-up of its service by partnering with the existing M-Pesa service rather than setting up a system from scratch as others have, even if it means some earnings are shared. The financial details of the deal have not been disclosed.

Safaricom's M-Pesa, launched in Kenya in 2007 and aimed at people who did not have access to conventional banking and branch accounts, allows users to pay for goods, pay bills, make deposits and withdraw cash from authorised agents. Safaricom is 40 percent owned by Britain's Vodafone. 

KCB, which also operates in Uganda, Tanzania, Rwanda, South Sudan and Burundi, serves 4.5 million customers through its traditional banking network. KCB M-Pesa is currently available only in Kenya.

Kimathi also said KCB planned to expand its traditional network into markets such as Ethiopia, Somalia, Djibouti and the Democratic Republic of Congo over the next five years. "There is quite a bit of business that Kenyans do in Somalia now," he said.

SOURCE:REUTERS