Jamii Bora Bank to share revenue with customers

Jamii Bora Bank will start sharing revenues with its customers and workers selling its products in a rewards scheme aimed at growing its customer base.

Sam Kimani, the CEO of Jamii Bora Bank, said staff and its customers will earn a commission of between five and 10 per cent on the transaction fees paid by a client they introduced to the bank.

Those introducing customers who deposit more than Sh5 million with the bank will earn both commissions on the deposits and from transaction charges—signalling the bank’s intention to gather more deposits for onward lending.

“The big banks are using the agents to grow their customer base; we will use our individual customers as our agents,” said Kimani, adding that a pilot programme done in August proved successful.

The bank aims to increase its customer base to 300,000 customers by December from the current 230,000.

The bank—which had a single Central Bank approved deposit taking branch in December—is looking for new customers to feed its growing network.
It currently operates 10 branches with four others to be opened by end of the year.

Jamii Bora sold a 25 per cent stake worth Sh320 million to a consortium of investors, Messrs Asterisk Holdings, to grow its retail network and beef up its capital to the Sh1 billion required by Central Bank of Kenya before December.

Presently, it’s raising Sh500 million through a rights issue to boost its core capital, fund expansion, upgrade IT network and move into new product lines, including corporate lending and forex trading.

Its core capital stood at Sh800 million from Sh230 million in 2010 and CBK has given banks until December to meet the threshold.

It also made changes to its executive suite with the appointment of Kimani as its new CEO and Timothy Kabiru, formerly retail director at KCB, as executive director.

Mr Kimani was a deputy CEO at KCB Bank where he quit in May last year after a reorganisation of the bank’s top team.

The changes have begun to bear fruit as Jamii Bora returned a profit Sh9 million in quarter one compared to a loss of Sh37.8 million last year.

The bank has been making losses since 2005 and brought in new shareholders in 2008 to shore up its eroded capital base and sharpen its competitive edge in the face of growing competition in the banking sector.

In 2009, an investment club dubbed Baraka Africa Fund bought a stake in City Finance Bank before Jamii Bora trust and Scandinavian Group moved in and changed its name to Jamii Bora Bank.

Troubles at the bank started in 1998 after it was placed under statutory management.