Nigeria’s biggest lender Access Bank Plc says it will give focus on commercial lending to Kenya’s agriculture sector after it acquired Transnational Bank Ltd.
For the Kenyan market, the Group managing director Herbert Wigwe says they will focus on commercial lending to agriculture.
Access Banks’ Commercial Banking Division maintains a pivotal role in the Bank’s five-year strategic growth plans which cover various sectors, including General Commerce, Manufacturing, Power, Oil & Gas, Construction, Public Sector, and Agriculture.
“We will build on TNB’s existing expertise in agricultural financing and deploy our resources to optimize other business segments,” he said in a statement following Central Bank of Kenya’s (CBK) green light for them to acquire Transnational Bank.
The agribusiness sector in Kenya entails all businesses involved in agricultural production including farming, contract farming, seed supply, Agrochemicals, farm inputs, wholesale distribution, marketing, packaging, and branding.
The Kenya Bankers Association, ‘Realization of Full Potential of the Agriculture Sector‘ commercial lending to the agriculture sector has remained low accounting for 4% of the total lending portfolio.
According to the research, public expenditure on agriculture as a percentage of total expenditure stalled at between three to six percent between 2000 and 2015, way below the ten percent target set by the Comprehensive Africa Agriculture Development Programme (CAADP).
Under the Big Four agenda, the Government has allocated Sh20.25 billion to enhance food and nutrition security to all Kenyans by 2022.
Access Bank says with the acquisition of Transnational bank which will be effective February, aligns with their strategy to become: ‘“Africa’s gateway to the world and we are excited about the potentials that reside in the East African market,” he said in a statement.
“We will leverage our presence in key payment corridors, strong partnerships in non-presence countries — robust technology platform as well as world-class risk management to provide cutting edge financial solutions to our clients.”
“We are committed to supporting the growth and development of our host community in line with our sustainability ethos and are certain that this acquisition will deliver great value to our stakeholders.”