The Central Bank of Kenya (CBK) wants Absa Kenya to use fair and responsible pricing of loans to connect customers to the new brand as it drops the 104-year old Barclays Kenya brand.
The regulator says many banks have been seen as insensitive to the needs of Kenyans through high cost of credit, opaqueness and poor customer service.
Governor Patrick Njoroge says Absa will have to deliver beyond just name change if it is to connect with the aspirations of customers.
“Only by being more customer centric, fair and responsible in pricing, transparent and ethical will Absa Kenya breathe life into its transformation,” said Dr Njoroge in a press statement.
“The true affirmation of Absa Kenya’s transformation can only come from the changed lives of its customers through shared growth and prosperity of a broader segment of Kenya’s populace.”
Interest rate caps were dropped in November last year, handing banks free hand in pricing loans but Dr Njoroge has warned the sector from sliding back into punitive interest rates of as high as 25 percent.
He issued Banking Sector Charter in 2019 to move banks towards customer centricity, risk based credit pricing and transparency.
Absa dropped its old name on February 10, 2020 having received approval from the CBK and the registrar of companies.
Dropping the ‘Barclays’ brand was triggered by a decision by London-based Barclays PLC to significantly cut its stake in Barclays Africa and consequently in Barclays Kenya.
Barclays Plc gave a condition to Barclays Africa and its subsidiaries to drop the name by mid-2020. Barclays PLC now owns 14.9 percent stake in Absa Kenya, down from controlling stake of 68.5 percent.
The brand has been part of Kenya’s history, from the colonial days to independence and to the present. The Kenyan unit was more into serving the interests of the British colonial settlers before repackaging its products to the local market needs.
CBK says Kenya is at a critical juncture with emerging opportunities but with risks, especially from the banking sector.
“There are however long standing challenges bedevilling the banking sector that could threaten this favorable outlook,” says Dr Njoroge.