Financial sector jolt as Kenya Commercial Bank enters Somalia in December

Kenya Commercial Bank will open a branch in Mogadishu by end year following talks between Somalia’s President and his Kenyan counterpart Uhuru Kenyatta in the sidelines of the IGAD Summit in Mogadishu Tuesday.

The bank which is Kenya’s largest in assets base will be the first Kenyan bank to venture into the Horn of Africa country and is expected to excite competition in Somalia’s financial sector which is largely informal.

Addressing a media briefing after the Summit Tuesday, Kenya’s foreign affairs minister Amina Mohamed said both countries had agreed to work on establishing cross border economic initiatives, details which will be agreed during an upcoming Joint Commission of Cooperation, a mutual relationship facility by the two countries.

“The leaders agreed on the development of financial services between Kenya and Somalia and will begin by establishing a banking facility in Mogadishu and that will be done by December 2016. And that will be done by Kenya Commercial Bank,” said Mohamed.

Kenya Commercial Bank’s entry into the Somali financial market will open up the banking sector the more in Somalia which currently has one bank with Automatic Teller Machine and offers international transactions.

Premier Bank opened in Mogadishu in 2014 and currently offers Visa and Master Card services.

KCB has branches in South Sudan, Tanzania, Burundi, Rwanda and Uganda.

The Kenyan government has 17.6% shareholding at KCB.