Efforts to acquire a specialised bank for western Kenya has taken a new turn after the 14-county bloc kicked off the search for a new consultant to lead the process.
The consultant is expected to oversee the acquisition of a “suitable bank in a timely manner”, the secretariat running the Lake Region Economic Bloc said.
Interim chief executive Abala Wanga said 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 said.
Sources said 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 was cautious.
The decision to look for a new consultant implies that the group favours a risk-taker who will speed up the process even as Mr Wanga maintained that Mr Oduor-Otieno is eligible to reapply.
“What we want to do is identify a really prudently-managed bank that we can have to run as a development and commercial financial institution,” he said.
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 consultants will do due diligence, forensic audit and give us a bank with a clean bill of health,” said Mr Wanga.
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 Sh200 million to build a Sh2.8 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.
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.