Kenya Commercial Bank is considering opening shop in Ethiopia- one of Africa’s highly populated countries that did not have any foreign bank operating on its territory.
KCB believes that the ongoing reforms in neighbouring Ethiopia will lead to a more open market.
“We are looking at either partnering with an existing institution or setting up afresh as has been our regional expansion experience. It is the market we are looking at as a key growth area in the next level of our regional expansion,” KCB said.
Ethiopia has been closed to foreigners and available statistics show that less than 15 per cent of its 100 million people has access to a bank account.
There are 18 banks which are State-owned and Ethiopia government had maintained a tight lid on its financial services sector, keeping out foreigners.
Ecobank in 2013 estimated that Ethiopia’s unbanked population stood at 80 million, making it attractive to Kenyan banks.
Meanwhile another Kenyan firm Safaricom is also expected to set foot in Kenya to propel its flagship mobile money transfer services code named Mpesa.
Ethio Telecom in May this year agreed to allow some local firms to provide Internet services through its infrastructure, a move that allowed competition as well as expanded the data market. Analysts say Safaricom’s entry into Ethiopia would significantly boost its revenues.
“If confirmed, this is an important positive for Safaricom, and would offer an important upside on M-Pesa revenue growth numbers based on the number of subscribers it registers in the 100 million market,” Standard Investment Bank said in a research note.