Sunday, January 2, 2011

Banks rush to tap Eldoret’s new wealth

By GERALD ANDAE [email protected]

A sharp increase in businesses has triggered fierce competition for clients in the banking sector in Eldoret Town.

Different banks have set up a total of 18 branches in the town, with Diamond Trust Bank and I&M being the latest entrants in the market.

All are targeting farmers, athletes and numerous learning institutions that have sprung up in the region.

Bank of Africa managing director Ahadi Kwame said during the official opening of its branch in the town last year that the bank was targeting international athletes and large-scale farmers.

“We cannot ignore the athletes who choose to bring their hard-earned money back home to grow the local economy.

“This partly inspired us to come to this market and provide financial services that will see these investments grow into mega businesses,” said Mr Kwame.

He also stressed the importance of farmers to the bank, saying Eldoret was a renowned agricultural town and needed more financial services.

To lure the international athletes, most banks in the town are coming up with attractive incentives.

Some have started sponsoring local races to soften the hearts of the runners to invest their wealth with their banks.

The competition for customers is so intense that micro-finance organisations like the Kenya Women Trust Fund (KWFT) have been forced to transform themselves into banking institutions to get a slice of the lucrative business.

In October last year, KWFT launched a deposit taking branch in the town where customers can borrow money and open bank accounts, besides offering money transfer services and issuing bankers’ cheques.

KWFT managing director Mwangi Githaiga said at the branch’s opening ceremony that the institution was responding to demand by offering innovative products and services through modern channels like the mobile phone and Automated Teller Machines.

Eldoret now plays host to a large number of private universities and other institutions of higher learning which have established campuses in the town.

These include the Catholic University of Eastern and Central Africa, Mt Kenya University, Elgon View College and the Kenya Institute of Management.

Opened up opportunities

Eldoret International Airport is another institution that has opened up more trade opportunities.

The town, which was hard hit by the post-election violence of 2007/2008, is steadily regaining its economic status as more investors scramble for a share of the pie.

And banking on the peaceful voting in last year’s August 4 referendum which the business community used as a yardstick to gauge market trends, new buildings are sprouting up, a sign that investors are confident of a good future in Eldoret.

The post-election violence resulted in numerous investors abandoning the town after suffering huge losses to looters.