SMEs - What Co-op Bank's Acquisition Of Jamii Bora Should Mean For Small Business Enterprises

By David Mugun |Author|Consultant|Storyteller|

That Co-operative Bank has acquired a 90% stake in Jamii Bora Bank, and then, promptly renamed it Kingdom Bank, is the best news in August 2020, a hitherto dark month in Kenya's history and especially while right in the eye of the Covid-19 storm.

Co-op Bank's director of credit, Anthony Mburu, is the new man at the helm of the rebranded subsidiary and the onus is on him to steer it through change amid a pandemic. Co-operative Bank is proving to be a good student of Winston Churchill who in the 1940s said that one must "never let a good crisis go to waste." There is always a silver lining around dark clouds and perhaps a silver bullet therein too.

What is now out in the public domain is Co-op Bank's much-anticipated purpose in Kingdom Bank. Word on the ground has it that its acquisition will be a boon for MSMEs, a neglected lot that is often treated like a classy clande` when all economic indicators are looking up and then treated like a colourless gold digger in times when donors and the government have to cajole banks to be considerate with them. We hope that he or she has now found a house of his or her own to settle down into at Kingdom Bank. One can only wish that this lot will no longer have to move from institution to institution in a manner akin to moving from one boarding and lodging house to another whilst alleviating the insatiable appetites of exorbitant 'sponsors'. No person was born condemned to perpetually try too hard if everyone did their bit well enough.

The SME sector at present carries the greatest growth potential because over 90% of documented businesses are in here but numbers seldom lie even when it hurts. Despite the huge number in absolute terms of the duly registered business entities, those termed as corporate organisations take the lion share in contribution to GDP. It is a very big possibility that less than 10% of registered but well-resourced organisations in Kenya, contribute 70% or more to GDP. These are the few comfortable corporations.

Humongous factors of production such as landmass and capital employed in all the industrial sectors are dominated by a select cabal of individuals who were either positioned well at independence or were suave enough to gain favours in the succeeding regimes. There are a few exceptions to the rule like inventors that occupy the innovations space in here too. This group does not bank at places like Jamii Bora. They are found strictly in tier-one banks and they are quite ok with that fact as they are well attended to.

Disturbingly, a vast number of MSMEs have kept hopping from one bank to another as the wildebeest do when they take the risk of crossing the crocodile-infested Mara River, looking for a homely place to find the real centre of gravity for their business activities. Kingdom Bank, aptly named in line with the foundations of Mr. Gideon Muriuki's strong Christian principles domiciled in the everlasting heavenly Kingdom, must surely first make it a heaven on earth for small business owners.

It certainly is heaven on earth for the members of staff whom I found in a jovial mood on the day that the new signage now decking the Milimani branch entrance and also atop the same headquarters building, went up. Their conversations had moved from short-term natured the previous week to a much longer-term thought process with Co-op infusing much-needed hope. A bigger muscle from Co-op Bank must now mean much more for the thousands of businesspeople who have braved the Covid-19 biblical-like plague. Mr. Muriuki and his team understand this too well.

Co-op Bank must never let the Covid-19 crisis and the compounding effects of the economic downturn experienced progressively since 2014 go to waste by stepping in the gap for the millions of families that work hard in business but still bite the dust. It has been a very long wait. There is always a blessing that follows such acts of courage. The kind that only those who christened the new outfit as Kingdom bank are privy to, given that they surely pray for their customers as others prey on theirs.

And just as this bank rose from the ashes of a terrorist triggered bomb blast a little over two decades ago, into the formidable institution that it is today, the same fete must be replicated in Kingdom Bank so that, our small business people are given a chance to rise from the myriad of challenges that afflict them today.

Could this be the golden moment for Kingdom Bank to set the pace? Only time will tell. I wish the new banking arrangement every success.

Finally, in moments like these, we must never forget to credit the Central Bank of Kenya for supporting this marriage, that per se is not one of but rather will bring about convenience to many that get associated with it.