StanChart Kenya has announced it is working on a mobile loan product as part of its strategy of accelerating digital penetration.
Speaking during the bank’s half-year financial results, Standard Chartered Kenya Chief Executive Officer Kariuki Ngare said the lending product will be open to individuals and SME’s.
The bank, which launched its retail digital outlet via the SC Mobile app in April, is also working on automating its lending process across all channels.
Kariuki said the SC Mobile will have QR Pay capabilities in addition to the existing functionalities that allow individuals to open an account in minutes while existing customers can transact and pay utility bills via the app.
The bank will likely add the lending spec to the SC Mobile app.
“We have positioned ourselves to disrupt with digital, reinforce market leadership in wealth management and increase our cross-border network business as we support and grow with our clients. We have been prudent in managing our balance sheet focusing on sustainable growth, underpinned by strong capital and liquidity ratios. This has delivered a 5 percent growth in pre-tax profits to Sh6.9 billion,’’ said Kariuki.
Kariuki added the bank is investing in developing and scaling new business models particularly in digital channels that will increase reach.
In April, the bank through its venture arm, SC Ventures, opened its Africa eXellerator lab which seeks to identify and nurture fintechs in Kenya, positioning the startups to partner with the bank in Fintech products.
In the period under review, over 83 percent of transactions were done outside the branch. The bank has 70 digital services with more products in the pipeline.
Stanchart joins a handful of banks that have launched or revamped their mobile loans products, further cementing their position as the leading source of mobile loans in Kenya.
Barclays’ Timiza app, launched in December 2018, had attracted 3 million new customers in 9 months against a target of 1 million customers within a year.
Meanwhile, KCB M-Pesa revamped platform increased loans disbursed from Sh14.9 billion in Half Year 1 2018 to Sh66.7 billion in HY1 2019, (link)
KCB and CBA, the backers of M-Pesa Fuliza overdraft facility, have also booked significant gains since the product was launched in January this year, while Equity Bank announced that it disbursed 1.9 million loans through its Equitel app.
According to analysts at Genghis Capital, Stanchart’s move to focus on the retail space could be in line with reducing the cost of funding, improving asset quality (corporate book has accounted for the bulk of NPL) and a drive for efficiency on digital platforms, which the bank has heavily invested in.
“Despite this, management has shown no indication of laying off its conservative strategy, which should curtail growth prospects for the bank, especially with the existence of more aggressive players in the retail segment,” notes Genghis.