NIC Bank signs M-Pesa, MoneyGram and Western Union cash transfers deal

NIC Bank has signed agency deals with M-Pesa, MoneyGram and Western Union, seeking a piece of the growing cash transfer services business.

The lender, which serves mainly small and medium enterprise (SME) customers, says the partnerships will help it reach more retail clients.

The deal with Safaricom –which runs the M-Pesa financial services— has made NIC a super-agent for the service that is mostly accessed through mobile phones.

This will see the bank offer transactional services including purchasing of float —virtual cash balances— to M-Pesa agents.

Customers sending or receiving money from abroad can also do so at NIC branches using MoneyGram or Western Union.

“This partnership is in line with the bank’s strategic agenda to grow our customer base, both across retail and SME segments by offering a wide range of products and services,” NIC’s chief executive John Gachora said in a statement.

“It also positions us to grow our diaspora proposition and tap to the growing remittances into Kenya through MoneyGram and Western Union.”

The latest deal with Safaricom builds on an earlier one last year that allowed NIC to make bulk cash transfers riding on the telecom firm’s M-Pesa, targeting SMEs with casual staff.

The bank is betting on the wider range of services to grow its market share in the retail market which supplies the cheapest deposits besides generating fees on transactions including withdrawals.

NIC Bank also plans to recruit more retail and SME customers by opening more branches in the region in the near term.

Banks strong in serving retail customers such as Equity, KCB, and Co-op Bank have dominated the diaspora remittances market mainly due to their larger branch networks.

This has seen them benefit from transaction-based income and deposits from the cash inflows. NIC says the new partnerships is part of its strategy to become a one-stop shop proposition that is aimed at attracting customers through easier, faster and convenient banking.

The lender recorded a two per cent profit growth in the first quarter, weighed down by a sharp increase in bad debts.

Its net profit in the period stood at Sh993.8 million compared to Sh973.9 million the year before.