MEGA Bank: The GEMA’s haven to a Non-Mt.Kenya Presidency

Q&A with Mr. Peter Kuguru, the Chairman of the MEGA Initiative Welfare Society and Managing Director of Softa Bottling Company Limited on the challenges that continue to delay the establishment of MEGA bank which was initially planned to begin operations in August last year

Q: What is MEGA Initiative Welfare Society and what are its objectives?

A: The initiative was started in 2004 to revive the MEGA communities’ culture. The communities include the Meru, Kikuyu, Mbeere, Kirinyaga and Embu who share a common cultural heritage. Such cultural revival is essential to the communities since their cultures were adversely eroded by the colonial administration.

MEGA initiative will also help the communities to establish social activities and empower communities economically. MEGA help the communities to interact with other communities. We have formed an intercommunity council of elders which has started reaching out to other council of elders’ such as the Luo, Kamba, Mijikenda and Kisii council of elders. It is our strong contention that this will increase harmony between communities and thus provide a good intervention to eradicate tribal clashes and address political disharmony.

Relationships between the council of elders are expected to enhance transfer of information between communities and the sharing of national resources for tourism purposes. It’s going to be a boost to domestic tourism. We want MEGA members to visit western and see bull fighting and the communities can also come enjoy the magnificence of the Mt. Kenya.

Q: In which areas does the initiative intend to share knowledge and experiences with other communities?

A:We want to start economic projects such as the MEGA bank. We want to build the bank to a level where we can trade with other communities. Although, we are trying a number of community banking models, one thing is for sure, the bank will avail its services to those in the villages.

We hope to provide our clients with better terms and good interest rates. We have just learnt that the new Islamic Bank will not charge its customers interest on loans, we are looking at their model also to see how we can do it.

We believe that community banking has great potential such as the case with Barclays Bank in Europe which charges only six per cent interest on loans. Currently commercial banks in Kenya levy interest at between 14 and 15 per cent.

Q: What progress has the initiative made towards constituting the six functional committees and how are they fairing on?

A: The committees are already in place. The intercommunity relations committee already conducted about four seminars, Lat year, it met the Luhya council of elders’ among others. Another seminar is being organized by the committee at Gretsa University in Thika under the theme “Know yourself to be able to reach out to others.”

Q: What are the priority investment opportunities?

A: Other than the MEGA Bank, we are also considering the fibre-optic cable system and the construction of a museum around the Mt Kenya region to act as a reference point to the regions cultural tourism. We are also considering entering into garbage management in certain towns as well as investing in schools and communications. We also welcome other ideas from our members.

Q: Now that your initiatives has a bigger focus in rural areas, what are the alternative investment options that you intend to provide to this group of people to improve their livelihoods?

A: We will put up MEGA markets. We are intending to buy property within towns and build a market but charge a small operation fee. This is particularly in anticipation that the council markets will be eventually privatized and we would want to cash in on this opportunity. We will not compete with local business but will seek to build others.

Q: What is the contribution of Kenyans in Diaspora to the MEGA initiative?

A: We have people from London who have shown a great interest in this initiative. Already, there are eight branches in the UK participating in MEGA projects and we anticipate that more people in the Diaspora will enlist as members.

Q: What is the progress towards the establishment of the MEGA bank and which parts of the country do you anticipate will be first covered?

a: We have raised Shs 40 million. We still need to reach the Shs 250 million which is a legal requirement for investors in the banking sector. We missed the August deadline last year, but we hope to be up and running this year. We also intend to raise about Shs 1 billion. The headquarters will be here in Nairobi and we target is to open at least four branches every year, based on feasibility results. Our vision is to cover the cluster of people deemed unbankable.

Q: There is stiff competition in the banking sector currently. What strategy will MEGA bank use to attract a significant share in the market?

A: Our concept will be friendly to structural adjustments. We intend to penetrate through savings and cooperative societies and also help to develop such structures. We will formulate ideal banking products for ‘mama mboga’, ‘mkokoteni’ operators and many others in the low end bracket that has been deemed unbankable in the past. We are not looking up to big profits in a short while and will not hire expatriates.

Q: What are the requirements for one to be a MEGA member and what are the benefits?

A: Life membership is Shs.10,000 while annual membership is Shs200. Members will buy shares in the companies such as MEGA Bank.

siRKen Note:

Word is rife that the real reason behind MEGA initiative is political empowerment through control of the economy. Wealthy Mt. Kenya businessmen and professionals have teamed up in MEGA and are sending out feelers to wealthy individuals in other communities. The real intention is to control the presidency with the assumption that in the event of an unstable presidency and political environment the rich investors loose out the most. Why not pool resources and endeavour to determine who gets the presidency? Back a person who will protect their interests; capitalist nature of the business and investor community.

With the Mt. Kenya bashing that has dominated political discussions and propaganda for the last two years, the Mt. Kenya elite (esp. Kikuyu) feel threatened with an ODM (read Raila) presidency. Raila’s perceived anti-capitalism stand, anti-kikuyu political domination and remarks on the NSE (e.g. reversing IPOs) has made the Central Kenya business community paranoid. NSE Chairman, Jimnah Mbaru (a key player in the MEGA initiative) recent remarks about expected market volatility in the case of an ODM presidency is a case in point.

Word out is that the MEGA initiative (and the larger Kenya business community) feel safe with a Kibaki second term and is rumoured to have set aside billions of shillings for his campaign. The initiative is currently shopping for an alternative candidate in case Kibaki re-election bid becomes untenable. In the alternative shopping list includes Kalonzo, Uhuru and Mutava; who are also considered 2012 tentative heirs to the throne.

The MEGA initiative will also protect the Mt.Kenya communities in case ODM wins the presidency and goes ahead to implement its majimbo (federal system of government) policy.

On the ground, MEGA is facing a credibility crisis and is viewed with a lot of suspicion. Most of the leaders are self-installed a reason why there is a push to have elections in the course of the year.



Bookmark the permalink.