The sale of Uganda Commercial Bank UCB) to Stanbic Bank was supposed to bring about financial inclusion. However this has failed. Interest rates are still very high while largest percent of Ugandans remain unbanked.
While the number of banks and bank branches has increased to 26 and over 800 respectively, banks and bank branches remain concentrated in Kampala. Some districts like Lamwo, Sembabule hardly have any bank branch.
Government has moved in to solve the problem by empowering and recapitalizing PostBank to take over the role of financial inclusion. By recapitalizing Post bank and upgrading it from Tier 2, the bank we will open up new lines of business such as dealing in foreign exchange. Recent developments by Post Bank tell a story that the bank that was recently under capacity, lacked a clear focus, poor visibility is now ready to fly. The bank has underdone internal re-organizations in the recent past as it prepares for the next big thing. Financial institutions like Centenary bank, Pride microfinance are worried of this new kid on the block who seems to take over their market.
Newz Post has learnt that the bank is undergoing internal re-organization in terms of recruiting competent people to steer the ‘take off’. Thanks to this reorganization, the bank is now among the top three banks (Centenary, DFCU) earning from big from interswitch. Thanks to wider network coverage. Currently 35 branches, nine mobile banking vans and operating in more than 47 districts branch network is supported by point of service machines and cash points across the country. This grand movement has scared Centenary bank. Centenary has had to move fast to launch a number of initiatives lately including women clubs, mobile money partnership with MTN and Airtel and also revive group lending. Centenary bank had abandoned group loans leaving it to FINCA and Pride Microfinance. Indeed these two have been making a killing.
Postbank has about 270,000 clients and is said to be attracting more women. More 37 percent of all new accounts opened in past three years are women. This has been achieved through its low cost pricing methods and the women mentoring programs. The bank carried out pilot of women empowerment in collaboration with village level groups in the far East country, The bank has offered banking services to Bulambuli women association for past two years, the group formerly a village widows association has been empowered and now boasts of over 300 customers who are rated among the 20 best performers of the bank.
Widens network coverage
The bank has a grand plan of increasing her branch network especially in the upcountry areas. In the past few months, the Bank that targets low end has opened up a number of new branches in areas like Bweyale, Amortar and Napak and according to sources, more branches are coming soon. Unlike before, this time around, the management is very conscious, before opening a new branch they undertake feasibility study and draw a good marketing strategy to ensure they get value for their money. In places where they don’t have branches, they are using Interswitch and mobile vehicle banking. With the Agency banking law in the offing, Post bank has laid a firm foundation and is most likely to benefit from it than any other bank. The bank was the first to launch mobile banking vehicle innovation in Uganda in 2007, they have also employed Point of Sale terminals in Savings and Credit Associations(SACCO’s) to increase service delivery to rural unbanked.
In Kenya, Equity bank is said to have exploited Agency banking to profitability. It’s no wonder; it’s now one of the major banks in Kenya and in the region.Set to join clearing house
Her status of Tier2 denied her access to some benefits. For example, Post bank could not access the clearing house, has been working through other established banks. Bank of Uganda hosts and facilities the clearing House where clearing bank do presentation and settlement on non-cash instruments-cheques, drafts, debit/credit notes and electronic records. There are currently 19 licensed commercial banks who are members of clearing house. Reliable information reveal after government pumping in more money to meet the minimum requirements, Post bank is set to become member of clearing house. This development means Post bank will cut down on her costs of trading makes it more competitive.
Marketing and positioning
The bank is said to be more professional and changing the way they do marketing, branding and positioning. The bank recently drafted a five year marketing plan as they enter a new world-Tier one. The bank is now being positioned-with communication manager to handle this docket. The bank has of late improved her visibility. They are all over media, doing more meaningful corporate social responsibility. Market intelligence reports indicate the bank is already reaping from this investment. Post bank was for example the main sponsors the Empango celebration 2015. Empango is an annual Bunyoro Kingdom effect. The bank is said to be already counting the benefits- the Bank’s Hoima branch has ‘risen up’ business is booming and has since joined one the best performing branches.
Early this year, the bank donated sh20mn to Buganda kingdom. The donation was aimed at boosting the Kabaka’s Birthday Run and Tofaali projects. These initiatives are also meet to improve on bank’s visibility. In order to improve its corporate image, the bank has given her braches a facelift. Branches like Masaka have been renovated and greatly improved. The improved visibility is likely to attract middle income and corporate customers. It’s no longer bank for very low end.
The regional branches have the full support and backing of the Bank’s head office in Kampala, with frequent rotation of specialist staff. This ensures that the bank’s branches meet the financial needs and expectations customers around the country.
When the Postbank went to ‘‘sleep’’, a good number of her customers ran to the competitors. With revived and vibrant team under leadership of Stephen Mukweli, the Bank’s Managing Director, Bank has rolled out a program to vow back the ‘‘lost sheep’’. The bank is making it easier for these former clients to revive their accounts.