28th May 2021 Trade & Financial Services Round Up

May 28, 2021 - Reading Time: 6 minutes - By Acha Ouma

Lobby seeks loans to help Covid-hit SMEs diversify

Kenya National Chamber of Commerce and Industry Thursday called for banks to raise lending to small businesses seeking to expand product lines and enter new markets on the back of disruptive coronavirus.

The appeal comes on the back of the chamber’s study showing majority of businesses are struggling to access credit since the onset of the pandemic mid-March last year.

The lobby’s president, Richard Ngatia said increased credit will allow businesses to diversify into areas such as personal protective equipment, online services, food retailing and logistics.

Source: Business Daily Africa

Total mortgage book falls Sh5 billion on Covid jitters

Mortgage loans disbursed by financial institutions dropped by Sh5 billion last year as customers rattled by the Covid-19 economic fallout adopted a cautious stance.

Outstanding mortgage loans were reported at Sh232.7 billion in the 12 months to December, compared to Sh237.7 billion in a similar period to 2019, the Central Bank of Kenya’s Bank Supervision Annual Report 2020 shows.

The health pandemic has forced employers to shed jobs and institute pay cuts leading to reduced demand for houses with fear to re-service the loans hence affecting the mortgage books.

The decline also coincided with the aggressive move by Housing Finance to recover bad loans while exiting the home construction business as announced in 2019.

Source: Business Daily Africa

Deals by foreign banks’ Kenya offices fall 27pc

The volume of business handled by representative offices of foreign banks in Kenya dropped by a quarter last year compared to 2019, hit by the disruptions in international trade and investments caused by the Covid-19 pandemic.

The nine representative offices transacted deals worth $3.42 billion (Sh368.5 billion), down from $4.67 billion (Sh503.2 billion) in 2019.

Representative offices carry out research, marketing and liaison roles on behalf of their parent banks. They are however barred from conducting commercial banking services which include deposit taking unless they open a full-fledged subsidiary or branch.

“The decrease is largely due to a slowdown in economic activity coupled with the effects of the Covid-19 pandemic. The activities facilitated largely comprised trade finance, term loans, working capital, bilateral receivable discounting, syndicated finance and correspondent banking,” said Central Bank of Kenya (CBK) in the bank supervision annual report for 2020.

Source: Business Daily Africa

Uhuru pushes for fast passage of higher NHIF payments Bill

President Uhuru Kenyatta is pushing for speedy enactment of a Bill that will make it mandatory for all adults to be members of the National Hospital Insurance Fund (NHIF) and for employers to pay monthly contributions for their staff.

Mr Kenyatta asked Parliament to fast-track the passage of the NHIF (Amendment) Bill 2021, which will see every Kenyan above 18 years contribute in a bid to provide healthcare for all.

The government-backed Bill further seeks to compel employers to match workers’ monthly contributions to the Fund.

The Bill has since faced opposition from a section of private insurers and trade unions led by the Central Organisation of Trade Unions (Cotu).

Source: Business Daily Africa

Kenya eyes more debt relief in economic revival strategy

Kenya is keen on applying for an extension of the debt repayment relief from rich countries to free up cash to support economic recovery and bolster dollar reserves, the Central Bank of Kenya Governor Patrick Njoroge said on Thursday.

The Treasury in January secured deals to suspend debt service with the Paris Club of countries and other creditors, including China, covering the six months through June 2021.

Source: Business Daily Africa

Safaricom eyes 250 sites for 5G by end of year

Safaricom wants to raise fifth-generation (5G) sites by up to 17 times by the end of the year, making the superfast services available to more subscribers in urban centres.

The leading telco which in March launched the 5G technology with 15 sites says it wants to raise this to up 250 sites and take the super-fast internet to nine towns.

The expansion will equip more individuals and enterprises with 5G for use at work, home and when on the move, helping Safaricom to tap into the burgeoning mobile internet use in the country.

Chief Finance Officer Dilip Pal says this has been catered for in the capital expenditure plans for the telco.

Source: Business Daily Africa

KCB earnings flat at Sh6.3 billion on lower mobile loan fees

KCB Group’s net profit rose by a marginal 1.8 percent in the first quarter ended March, held back by lower fees and commissions on short-term mobile loans.

The lender reported net earnings of Sh6.37 billion in the review period compared to Sh6.26 billion the year before.

It is the second-largest net profit after Equity Group whose net income surged 63.3 percent to Sh8.6 billion in the same period on the back of higher interest and non-interest income.

KCB scaled down its mobile loans to mitigate defaults in the wake of the economic difficulty brought by the Covid-19 pandemic, hurting fees from the short-term credit facilities.

Source: Business Daily Africa


Airtel Uganda unveils no expiry data bundles

India’s Bharti Airtel subsidiary in Uganda has followed MTN’s footstep to unveil internet bundles with no expiry dates, enabling customers to browse with flexibility and comfort.

Amit Kapur, Chief Commercial Officer at Airtel Uganda, said the new product dubbed Chillax Bundles is meant to offer customers more options to enjoy the internet services.

The Chillax Bundles costs Shs 7,500 for a 1.5GB, Shs 25,000 for 7GB and Shs100, 000 for a 40 GB of data. This is almost the same price that MTN Uganda charges its customers for similar packages.

MTN Uganda unveiled the MTN Freedom Bundles in February this year in response to a legal suit filed in neighbouring Kenya over expiry of internet and voice bundles.

Source: The Independent

Mobile money firms to pay Shs50m for annual licences

Bank of Uganda has set Shs25m as the amount that telecoms will have to pay in annual licence to operate as a payment service providers or payment systems operator.

The two services are classified separately, which means that a telecom that wishes to operate both will have to pay a combined sum of Shs50m annually.

Telecoms are already operating as payment service providers and payment systems operators, which means they will be required to have the two licences.  The fees are contained in the National Payment Systems Regulations 2021, which effectively split mobile money operations from telecommunication services.

Source: The Monitor


BoT retains historic sum from bond auction

THE Bank of Tanzania (BoT) collected the second-highest amount from a Treasury bond auctioning in ten years after a 20 years bond was oversubscribed three times last week.

The government sought to raise 151.68bn/- at a coupon rate of 15.49 per cent but bidders tendered 443.3bn/-. At the end of the day, they took 361bn/-.

The bond, which on average was sold at a premium, saw bidders tendered three times the amount offered thus cutting down coupon and yield rates.

Zan Securities Chief Executive Officer Raphael Masumbuko said the amount collected was the highest in a decade to be taken from a single Treasury bond.

Source: Daily News

Tanzania joins One Network Area for lower cross-border call tariffs

After years of dithering, Tanzania has finally joined the East African Community One Network Area, which promises cheaper calls across the bloc due to harmonised calling rates. This means that charges on roaming voice calls in Kenya, Rwanda, South Sudan, Uganda and Tanzania will be eliminated. The benefits include easier and cheaper communication that will promote the ease of doing business in the region.

Pressure on Tanzania to join the network peaked at the June 2019 meeting of the EAC Transport, Communications and Meteorology Sector Council held in Kampala, where Dar es Salaam was given a deadline of March 31 to complete its analysis on the implementation of One Network Area.

But it has emerged that Tanzania made the decision to join the ONA late last year, and Foreign Affairs Permanent Secretary Stephen Mbundi wrote to the EAC Secretariat expressing interest in the deal. During last week’s private sector meeting held in Kampala, EAC director-general of Customs and Trade Kenneth Bagamuhunda announced that Tanzania had committed to the EAC Secretariat to join the network.

Source: The East African


Rwanda, France sign two bilateral agreements

Rwanda and France on Thursday 27 signed two bilateral agreements on the first day of French President Emmanuel Macron’s visit to Kigali.

The agreements were termed by both leaders as a new dawn in the relationship between the two countries in the process of resumption of ties.

The pacts include a framework for bilateral cooperation signed between French Minister for Europe and Foreign Affairs Jean-Yves Le Drian and Rwanda’s Minister of Foreign Affairs Vincent Biruta.

The two countries also signed an agreement for sports and talent development which saw Rwanda receive €1.5 million (roughly Rwf1.84 billion) for sport and talent development.  The two agreements were signed during a joint press conference.

The French President also availed 100,000 doses of Covid-19 vaccines to Rwanda which were delivered on his arrival.

Source: New Times


Equity salivates at Ethiopian market, Q1 profits up 64%

Equity Bank Group will not hesitate to enter Ethiopia once the country’s financial sector is democratised.  

Speaking at the Q1 2021 investor briefing, the group’s  MD James Mwangi commended the country for opening up its telecommunication sector that has granted a Safaricom consortium entry  into the market.

”Liberalisation of the telco market in Ethiopia gives us hope and optimism that banking & financial services are next. We are placing ourselves ready in the event that the opportunity presents itself,’’ Mwangi said.

Source: The Star

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