Commercial banks leave comfort zones in hunt for new customers

A synchronised selling rhythm from the shouting hawkers in their quest to grab the attention of potential customers is perhaps the best welcome note a visitor gets in Gikomba, the largest informal open air market in Kenya.

A quick sweep through the market, and you will understand why fire brigades hardly access the place in time incase there is a fire outbreak.

Once in a while you will hear a shout of “thief” along the market’s busy ‘streets’, then the noise that comes from artisans making their wares, small music bands wooing customers and much more.

But of late, a new breed of investors is arriving at Gikomba—banks.

As most banks initiate products that favour the small and medium enterprises (SME), attention has shifted to the fringes of urban centres which host informal businesses that oil the wheels of the economy.

A few years ago, areas such as Gikomba, Kariobangi and Dandora were considered a no-go zone for security and other business considerations.

But analysts said competition in the banking sector is pushing banks to such areas with the institutions opting to invest on security systems, but tap into the thousands of customers.

The recent entrant is CFC Stanbic bank, an institution largely seen aligned to corporate clients opened a branch in Kariobangi, joining the likes of Cooperative Bank and Equity who have already pitched tents in the area.

Cooperative Bank recently opened a branch in Dandora and another in Gikomba.

Mr Samuel Waweru, a trader recalls how different the market was four years ago when he had to close his shop for a journey to town to access banking services.

“Banks have realised where the money is. For years, it has been a daunting task to get banking facilities, ” said Mr Waweru.

“We were always scared of how to get our daily sales safely to banks. But today, I don’t have to worry any more of having to carry money all the way to the CBD (Central Business District) to deposit my money,” said Mr Waweru.

The trend for banks to venture into such markets, residential areas and suburbs coincides with an increasing number of investors moving away from the CBD to the suburbs and outskirts.

From supermarkets, to mobile phone firms; the low end market is the new investmet hotspot.

“CFC Stanbic Bank did not take me by surprise when they opened a branch in Kariobangi. Such areas attract huge volumes of small retail transactions that in the long-run are more attractive than the corporate clients at the CBD,” said Mr Wycliffe Masinde, an investment analyst at Kestrel Investment Bank.