Thanks to Equity, the big boys are now shaking

BARCLAYS BANK RECENTLY opened a branch in my neighbourhood. Now, that is the sort of place the very pukka doyen of establishment banking would ordinarily turn up their noses at.

Not too long ago, the big two, Barclays and Standard Chartered were going out of their way in competing to distance themselves from the hoi polloi.

They aggressively kicked out those without much to bank, made it clear they would lend only to those who could provide documentary proof that they did not need the money in the first place, and closed dozens of branches across the country, particularly in rural areas.

Even agriculturally rich areas in the countryside were not spared the axe, the reason being, I suppose, that it was not the amount of money that a customer banked, but the pedigree of that money.

Some urban fellow in sharp suits and affected Queen’s English was valued more than some rustic peasant fellow who sullied the banking hall with his muddy gumboots, even if the latter had the much healthier account.

The came the counter-revolution in the banking industry, and the prestigious banks realised there were missing the boat. So Barclays comes to Nairobi West, no longer afraid to be sandwiched between an endless row of bars in the drinking capital of Nairobi.

Yes, the ears of the banking staff will be assaulted by the deafening cacophony from the 24-hour drinking joints, the honking matatus and yelling touts, the hawkers laden with wares who might just try to make their pitch for bootleg DVDs in the hallowed precincts of the banking hall....

Yes, the very prim and proper bankers will grin and bear it. Latest I hear is that both Barclays and Standard, and everybody else, are scrambling for space in Kawangware, Eastleigh, Gikomba and other centres of the capital city’s underground economy. They are even venturing back into the countryside.

In Nairobi, it is now common to find on sidewalks and alleys Barclays and Standard touts competing for space with other hawkers. The only difference is that they are in corporate colours and offering free account openings and loans rather than fruits, cigarettes, small electronic items and trinkets.

What made the big guns come to earth? One word. Equity.

No, they were not looking for equity, but that is the name of a struggling building society that moved aggressively into the space the big banks were abandoning, and before they knew what was happening, it had become a major rival.

Now the big banks have eaten humble pie, realised that they made some very foolish mistakes, and are desperately trying to claw back lost territory.

That is all to the advantage of the consumers, who had involuntarily been forced to become part of Kenya’s large unbanked population.

I CREDIT EQUITY BANK FOR shaking up the big boys to such drastic effect. But as the battle for the heart, mind and money of the customer rages, it is disheartening to read and hear stories alleging some hanky panky at Equity.

Some of the stuff peddled in the media and in Parliament sounds like pure propaganda. But all the same, the truism must hold that a banker must, like Caesar’s wife, be above suspicion.

And this standard must be applied even higher in banks like Equity and other growing local financial institutions like Family Bank.

This is because they are prospering on the trust of people who have previously entrusted their hard-earned money to indigenous banks, only to be ripped off by greedy managers and owners.

The locally-owned banks which fell like dominoes starting in 1986 collapsed largely because they engaged in very unconventional practices. Their owners and managers grew rich, and the poor depositor was taken to the cleaners.

Those bank collapses, incidentally, contributed to the growth of the foreign-controlled transnationals, especially in a situation when the big state-controlled banks were also being systematically driven to insolvency by the robber barons of the Moi regime.

It has take a long time for Kenyans to once again put their trust in homegrown financial institutions. It would be a tragedy if they were to be let down again.

It is amusing to see the power-sharing deals being worked out. One would have Mr Raila Odinga stand for President and undertake to appoint his main rival for the ODM nomination, Mr Kalonzo Musyoka, as Vice-President. Mr William Ruto would settle for the non-existent post of executive Prime Minister.

In the absence of US-style running-mate pair, Mr Musyoka would have to trust that Mr Odinga will, if elected, keep to his word and appoint him VP.

Then we presume that after campaigning so hard to get elected, Raila will push through constitutional amendment by which he will be reduced to a figurehead and surrender executive power to Premier Ruto? Tell that to the birds!

It gets more interesting. President Odinga would serve for just one term, giving way to Mr Musyoka in 2012.

He would then take over the premiership. Maybe it is only towards the end of his first term that the constitution will have to been amended to create the office of executive prime minister.


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