Faulu Microfinance Bank has announced a business refocus that will see it grow its digital banking offering and realign its distribution channels and human capital to drive sustainable growth.
This is part of a strategy by the bank to turn around its performance by becoming a strong traders' bank and digital finance provider, with management affirming the lender is on a growth trajectory.
The bank on Friday disclosed that it has received over Sh900 million from its parent company, Old Mutual, to strengthen its operations and reposition its business model for long-term growth.
“Over the last 18 months, we have made significant investments in enhancing our digital capabilities. We are eager to become a leader in the digital finance space. Many of the services that the bank offers are now available online, and we intend to make our services more accessible for our customers," Faulu Microfinance Bank CEO, Julius Ouma, said.
"We will also be leveraging the support of our Holding company, Old Mutual, who have committed over Sh900 million towards these operating model enhancements, to reposition Faulu as the digital bank of now.”
The Bank has also made a strategic decision to review its distribution channels in line with the new operating business model, supported by an active agency network of more than 70.
Faulu also announced that it would be growing its Micro, Small and Medium Enterprise (MSME) support offering, as well as implementing an enhanced distribution network.
“We see a great opportunity to grow our investment and support amongst MSMEs as they represent the life blood of our economy. We will also be providing more convenient transactional services,"Ouma noted.
Over the last year, the lender has been working with strategic partners to provide working capital facilities to MSMEs, through a flagship digital lending platform.
"We will also be providing more convenient transactional services across the board,” said Ouma.
Faulu, established over 30 years ago, has become one of Kenya’s most recognisable microfinance institutions.
The bank, which forms part of Old Mutual East Africa Holdings Group, has initiated the business refocus in response to growing customer demand for digital services, as well as to reduce costs and become more competitive, management said.
Old Mutual Holdings CEO, Arthur Oginga said: “With this change, we are both enhancing the Faulu service offering to our existing and future customer network, as well as positioning the business to deliver more value sustainably. Faulu has the full backing of Old Mutual in these endeavours, and we are confident that the refocus will drive shared value for all our stakeholders.”
Faulu chairman, George Maina, also expressed his confidence in the operational announcements.
“This refocus is also in line with our purpose of being our customers’ most trusted financial partner and helping them achieve their financial goals. It is also critical to the bank’s ongoing competitiveness in an ever-expanding financial services sector in Kenya," he said.
Faulu said that it would be communicating with customers and stakeholders over the coming days to inform them of these enhancements, which it expects to be fully operational within six months.