Friday, March 29, 2024

14 counties in Western Kenya step up process to form own bank

14 counties that form the Lake Region Economic Bloc have stepped up efforts to start their own bank. According to the latest reports, the bloc will no acquire an existing bank through buying of a majority stake.

To speed up the process, the bloc has kicked off the search for a new consultant to lead the process. The counties under the bloc are Kisumu, Kakamega, Bomet, Bungoma, Busia, Homa Bay, Kericho and Kisii. Others are Migori, Nandi, Nyamira, Siaya, Trans Nzoia and Vihiga.

According to interim chief executive officer Abala Wanga, the bloc has set its eyes on any of the stable lenders or financial institutions but will seek professional advice on the best option. “The bank we want to have is just like any other commercial bank, which is successful and with headquarters in Nairobi,” he says.

Additionally, according to the Business Daily, the bloc was initially keen on acquiring a controlling stake in any of the undercapitalised State-owned banks to finance the region’s projects but their current adviser, former KCB Group chief executive Martin Oduor-Otieno has been too cautious. This has in turn led the bloc to look for a new adviser who is more willing to venture out despite the existing risks.

Apparently, the bloc decided to acquire an existing bank to avoid the lengthy regulatory path of starting a new one from the scratch. The adviser is expected to determine the kind of shareholding or board membership the prospective bank should have — assuming the bloc buys it — and the branch network involved.

“The 14 governors from the Lake Region agreed to invest in a bank to help boost their development agenda. According to the regional bloc’s chairman, Kakamega governor Wycliffe Oparanya, each of the member counties would inject Sh. 200 million to build a Sh. 2.8 billion capital base. The bloc’s secretariat said the consultancy should be completed in the next 60 days ahead of the third summit and official launch in Nandi due in October,” reports the Business Daily.

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