Rabobank is a global food and agriculture bank based out of the Netherlands. The financier runs one of 10 Central Bank of Kenya authorised representative offices of foreign lenders in the country.
The Business Daily talked to Els Kamphof, a member of the bank’s managing board, who provided insights into the role played by the Nairobi rep office in building resilient food systems in the region.
What’s the day-to-day operation like for a foreign bank representative office like yourselves?
Our Nairobi office is part of a commitment to developing our business in Africa, working closely with the headquarters in the Netherlands.
Our staff on the ground are fully involved in the commercial business of connecting with clients locally from the bank, our foundation and our rural fund. The rep office gives us boots on the ground and local experience, which makes the difference for us.
This is the 11th year in this market, what would you say has been your impact/achievements so far?
From a global perspective, Africa was the first continent that Rabobank ventured into 40 to 45 years ago when we began international operations, initially through the foundation where we used earnings from the group to make impact globally. We have worked with small-holder farmers, cooperatives and have bought stakes in banks throughout Africa.
We opened this representative office in 2014 on the same note serving corporate clients in food and agriculture which are active on the continent as a global food and agriculture bank. Supporting commodity finance is very key for us.
Your Nairobi representative office also serves a regional role, tell us how you came about making the choice to base the hub here?
We wanted to have a presence in Africa, and we are happy with our choice of Nairobi. There are adequate talents here and there is also a vibe here.
What has been your working relationship with local banks?
We have previously had a working relationship with the Co-operative Bank of Kenya. We also have consulting projects with other banks, but our only stake is in Equity Bank, and we are very happy with that.
Your focus on food and agriculture finance makes you quite unique, how did this come about?
It connects with the roots that we have, having started as an agriculture cooperative in the Netherlands. This is who we are, and this is the knowledge we have, and this is what we want to do as well in Africa to create resilient food systems.
We have a lot of information and knowledge... for example with climate change we could advise farmers on alternative crops and this information is extremely valuable. If we would say SME finance, we would not be any different from any other bank.
With agriculture making huge swaths of countries’ economies in Africa, is it an automatic choice to base yourselves on the continent?
We have a presence in all the different regions, but each region is different from climate conditions to culture. The small-holder system is very typical for Africa, which requires a unique approach to other markets.
Given the population growth expected, it’s so important that food and agriculture develop on the continent. We bring clients together from different regions and we share knowledge and we hope that these clients collaborate.
What’s fascinating for this region is that the bulk of economic and population growth in the world going forward will happen here. 65 percent of all unused arable land is in Africa. There is a big opportunity to make this land suitable and start growing commodities on it. I am convinced the food and agriculture sector has so much potential to grow.
You have a foundation and a rural fund in addition to the commercial bank operations, how does this all come together?
A co-operative bank doesn’t have to serve any shareholders which is great. If you generate profits, you can use this for society and that’s how the fund came about. We don’t have dividends to pay to shareholders, so this is our co-operative dividend.
We also started a foundation in which we put a percentage of our profits every year and we use this funding to promote agriculture in developing countries and among small social entrepreneurs in the Netherlands.
We drive healthy net profits for the bank so we can use that beyond banking to invest in resilient food systems. This gives us a broader role beyond any other regular commercial bank which is fantastic. You compete with all other banks, and if you do well, there is funding available to make a difference in society.
We have seen some or at least one representative office wanting to convert their current license to a full-fledged bank, would you go down the same route?
It would depend very much on the scale of how food and agriculture develop. We make a lot of impact already which is good for Kenya and Africa, but I don’t think we would be currently suited to be a fully-fledged commercial bank in Kenya. Our aim is to make an impact beyond banking which we already do. I would never exclude anything but at this point in time I would say I am very happy with how we are positioned.
How do you approach competition among your peers (licensed representatives of foreign banks)?
I would say they are actually not our competitors as our offering is so different. We both come across the same clients but what we offer is different.
What is to come in terms of your impact in Kenya and Africa?
We continue to tap talents from Kenya and Africa through our graduate programme where we train young graduates on food and agriculture and they bring that knowledge back home. I believe in the potential of this sector, and we want to be there.
