KCB wins lucrative deal to disburse cash stipends for the poor
What you need to know:
KCB will handle cash transfers amounting to Sh29 billion in the first year starting March.
KCB was awarded the contract after beating other top contenders in a tender floated last year.
Beneficiaries have been receiving their cash at local post offices, numbering about 400 countrywide.
KCB has signed a deal with the government that will see the lender earn millions of shillings for disbursing cash to poor Kenyans under the social protection programme.
The Labour ministry will pay KCB a fee for issuing identified beneficiaries with biometric cards through which they will access their monthly stipends.
KCB will handle cash transfers amounting to Sh29 billion in the first year starting March.
The money is expected to cover 400,000 orphans, the elderly, disabled people and poor urbanites.
“KCB will not charge beneficiaries for the services rendered. The bank is in an agreement with the government regarding disbursement of the funds, details of which are confidential,” the lender said in a statement.
Beating competitors
Though KCB declined to discuss terms under which it will handle the Inua Jamii funds, it is expected to earn tens of millions of shillings from the service.
KCB was awarded the contract after beating other top contenders in a tender floated last year, with the government looking to curb fraud and boost efficiency in the nation-wide cash transfer plan.
Beneficiaries have been receiving their cash at local post offices, numbering about 400 countrywide.
The ministry is set to identify deserving individuals who will be allocated unique identification numbers for the programme.
KCB will receive the data and produce biometric smart cards for them after verifying each beneficiary at the point of registration.
The lender said it used its status as one of the largest retail banks in the country to win the contract which will boost its transaction-based income.
“With our reliable card business and our countrywide reach of over 240 branches and 8,000 agents, the bank will be able to offer convenient means of availing the funds to the registered beneficiaries,” KCB’s chief business officer said in a statement.
Alleviating poverty
“This initiative hopes to enhance convenience, security, accessibility and efficiency as well as accountability.”
The programme, aimed at alleviating poverty for millions of Kenyans, is expected to deepen in coming years.
The contract underlines the dominance of retail banks in the fast-growing cash remittances market which rakes in billions of shillings in the industry on an annual basis.
KCB, Equity, and Co-operative Bank have leveraged their millions of customers and hundreds of branches and ATM networks to handle the bulk of diaspora remittances to Kenya.
This has earned them fees besides growing their deposit base.
The Inua Jamii contract is part of KCB’s strategy of capturing a larger share of the card business as the government encourages cashless settlement systems including payment of fares in public service vehicles.
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