UBA Group looks to SMEs, corporate customers for brighter future

Pan African multinational, United Bank for Africa (UBA) Group sees a better future as the bank moves to strengthen its ability to meet the growing cross-border, corporate, Small and medium-sized enterprises (SMEs), and consumer financing needs.

The bank’s local unit recorded a 185 percent growth in profit after tax for the period ending December 31, 2018. Last month, the bank, along with some international banks, inked a Sh12 billion agricultural loan facility with Export Trading Group (ETG).

What impact do you think the Tony Elumelu Foundation (TEF) Entrepreneurship programme will have on the Kenyan economy a decade from now?

I think the significance of Tony Elumelu Foundation(TEF) Entrepreneurship programme is the fact that it acts as a catalyst in building entrepreneurs, supporting economic development and creating employment.

The programme started five years ago and to date, 477 Kenyan entrepreneurs have received seed capital and capacity building including training and mentoring.

The beneficiaries continually invest capital received in the economy.

They undergo rigorous training which they apply to grow their businesses. They employ Kenyans in different sectors of the economy.

In 10 years, I expect the thousands of employees who have joined the workforce through the companies built by these entrepreneurs to be key executives and sectoral leaders.

These firms will positively impact the economy in diverse ways. Kenya is one of the top three beneficiary countries of the programme.
In 2019, 113 awardees were selected with 36 percent female, a clear indicator of the programme’s contribution to financial inclusion and gender balance.

What are you doing as a bank to increase financial inclusion now that it has been identified at the Forum that access to credit is impeding SME growth and entrepreneurship?

The truth is that SMEs are the engine of economic growth in most economies, providing employment and income to majority of households.

In Kenya for instance, the 2014 National Economic Survey report by the Central Bank of Kenya (CBK) indicates that SMEs constitute 98 percent of all business in Kenya.

As a bank, we pay attention to SMEs given their contribution to the economy. We have tailor made products and solutions to meet the needs of SME’s across the regions and countries we operate.

UBA Kenya recorded 185 percent growth in profit and this was on the back of good performance in 2018, what’s working for you in the EA market and what’s not?

It’s true we had a record growth in profit but we look at it beyond that. We look at our contribution to the economy and the communities in which we operate.

Our expectation is that we will continue to be a development partner in Kenya. What has worked for us in Kenya is what has worked for us across the continent.

One, we have a vibrant and talented workforce who understand the economy and spearhead the implementation of our strategy. Two, we belong to a large pan-African institution, UBA Group, with operations in 23 countries in the world; 20 in Africa, as well as in the US, France and the UK.

That gives us the ability to serve our community of customers from different countries who do business in Kenya, across the region and internationally.

Thirdly, what has also helped us is our deep knowledge of the African market. We recently celebrated 70 years of existence as a bank.

Clearly, such knowledge and experience has helped us navigate the opportunities and challenges in Kenya, East and Southern Africa, and across different economies in the continent.
In Kenya specifically, we have used our experience and leveraged on our strengths to work with SMEs, individuals, corporates and the government.

We see our role as being a catalyst of economic growth and social development.

Sometime last year the bank was in the news for loans advanced to companies that later defaulted. What is the Bank doing differently to avoid such?

The question of non-performing loans in the Kenyan banking sector is real and it cannot be ignored. According to the Central Bank of Kenya reports, NPL is currently over 10 percent.

As a bank, we have put in place a robust credit underwriting framework, monitoring and recovery systems which we shall continue to apply.
What that does is to ensure that all the loans we grant our customers are properly utilized and secured. We continue to work assiduously towards recovering the debts as the facilities are secured.

In summary, we have strengthened our risk management processes and we are positive that going forward our credit portfolio will remain healthy.

Who are you targeting with the Sh12.5 billion agricultural loan facility that you recently launched?
In line with our strategic role as a development partner, we continue to support Kenya’s economic development through various initiatives.

In July 2019, UBA Kenya, together with a syndication of local, regional, and global banks participated in a financing agreement of up to USD 125 Million with Export Trading Group (ETG). ETG is an integrated agricultural group.

The funds will be used to support agriculture. Through this, UBA will be able to reach many farmers indirectly through ETG, further promoting sustainable food security.

The facility has enabled us understand the agricultural sector in Kenya, a predominant contributor to Kenya’s GDP even better.

We will continue to support the agricultural ecosystem in Kenya including small, medium and large-scale farmers, suppliers of inputs and others in the value chain.

You recently opened an office in London, what is UBA’s next growth area?
We constantly explore opportunities for growth across the continent as we deepen our presence within, and beyond the markets, where we currently operate.

We will continue to make strategic investments in technology and product development, as we provide our customers with innovative and convenient banking solutions.