Sidian Bank: We empower entrepreneurs to play definitive roles

Titus Karanja, CEO, Sidian Bank

The bank is on a transformational journey anchored on rebrand, tech, partnerships and people to be a Tier II bank by 2019

Sidian Bank-a full-service commercial bank providing an array of financial services to individuals and enterprises recently announced its strategic realignment, which began with a re-brand in April 2016, is on track and has started to yield positive results.

The bank, formerly known as K-rep Bank has been a leading player in Kenya’s enterprise banking sector. Sidian has a goal of creating wealth through provision of transformational financial solutions that meet entrepreneurs’ needs and facilitate growth through convenience and choice.

The strategy, which seeks to turn Sidian into a Tier II bank by 2019, is anchored on rebranding, technology, partnerships and people. It aims at moving the bank from its previous brand positioning based on segment (micro-finance) to one hinged on behaviour-the bank for entrepreneurs by entrepreneurs.

Strategic direction

Since the rebrand, Sidian Bank has made massive investment in technology as a driver of excellent service delivery. Thus far, is has introduced the SidianVibe framework that includes-an app which enables customer to transact seamlessly through mobile banking; Agency banking which has already been implemented with over 70 agents and continues to be rolled out throughout the country by a target of 3,000 by July 2017.The bank’s customers are also enjoying Visa services and an accessible 24-hour call centre.

Chief executive officer Titus Karanja says the bank will lay off 108 staff out of the total workforce of 500 through a voluntary scheme. “We are employing technology to improve efficiency in place of the retrenched employees and the layoff will cost about Kshs 70 million.”

Despite announcing the layoff, the bank has invested in recruitment of top talent in the industry which has seen a 13 per cent increase in the total workforce since January 2016. “We are further training our employees as a way of re-tooling them to be able to implement the bank’s strategy,” said the CEO.

The bank, majority owned by Centum Investment has a network of 37 branches and plans to open new outlets at The Hub, Two Rivers Mall, Sameer Business Park and Nairobi’s downtown River Road.

Sidian Bank has signed up a number of strategic partnerships. This includes a Kshs 10 billion first time entrepreneur promotion program with online cab hailing service Uber. “This will see up to 10,000 Uber driver partners acquire their own vehicles through 100 per cent asset financing over a three year period,” said Mr. Karanja.

It has also partnered with European Investment Bank as part of a value proposition to SMEs and will provide technical assistance for financial empowerment to customers.

A Sh 2 billion partnership with Medical Credit Fund (MCF) announced on July 2016 targets 3500 private medical services providers in Kenya. Under this, medical services providers will enjoy a loan of between KShs 100,000-Kshs 250 million to purchase or maintain their medical equipment as well as technical know-how from MCF. “Partnership for growth is one of our key focus area and we shall continue to work with various organizations on this front,” added Mr. Karanja.

“When we started on this transformative journey, it was clear that the achievement of our strategic objectives would hinge greatly on our ability to achieve an optimal fit between our staff and our business strategy. Transforming our people into the new generation of ‘bankers of the future’ is as important as transforming our products and processes,” affirmed the CEO.

The bank has further embarked on a voluntary early retirement (VER) scheme, which is part of its strategic journey to transform Sidian’s staff into bankers of the future-with superior tech skill-set, an entrepreneurial mind-set, enhanced professional knowledge and a culture that supports diversity of thought.  “The scheme offers an opportunity for staff who wish to transition to other career directions to do so at this juncture,” said Mr. Karanja.

Sidian aims to remain sustainable by making changes to its business model and increasing the channels business. “Our key strength as a nimble player is ability to pivot fast and thus continue to serve our target customers.”

New financial environment

Mr. Karanja admitted that the new changes in the financial environment capping interest rates at no more than 14.5 per cent has completely changed the playing field for financial providers. One needs to be innovative to stay afloat. As such, Sidian will continue lending to customers who have active transactions and good track record, and that innovative customer relationships will drive access to credit. “We shall also continue lending to start-ups where there’s access to data that enables effective credit scoring and secured businesses as a basis for funding.”

New reality

  • Existing Sidian Bank customers will enjoy products as assigned for until contractual maturity of the product.
  • New products for new environment are being rolled out.
  • Sidian aims to seek multiple relations per customer as opposed to maximising profit from every single product.
  • Selected businesses are now more viable due to lower cost of credit.
  • There’s no distinction between large and small banks. The new differentiator is efficiency, customer experience and capitalisation.
  • Products attracting new provisions and high operating expense are no longer viable