Highlight:Absa:Shaping Kenya’s Financial Future

Abdi Mohamed  took over as the CEO and Managing Director of Absa Bank Kenya Plc. from 1 May 2023. He has worked with Absa for over twenty-eight (28) years in which I have had over 15 years’ experience in senior leadership within Absa Group.

Absa Bank Kenya Plc is Pioneering and Empowering the Informal Sector in the Country;

• Can you briefly introduce yourself and share your journey within the Absa Group that has led you to your current role as CEO and MD of Absa Bank Kenya Plc?

Prior to my current position, I was the Managing Director of Absa Bank Tanzania from May 2016.I had previously served as Chief Operating Officer for the Bank in Kenya.

Other roles I have held within the organisation include as Consumer Banking Director,Regional Head of Islamic Banking, and Retail Director. I also serve on the boards of the Kenya Bankers Association (KBA) and UN Global Compact Network Kenya (UNGC).

I started my career as a teacher in Garissa after which I joined the banking industry as a teller in the same County after I cleared my undergraduate studies at Kenyatta University where I undertook a Bachelor of Commerce (Hons) degree majoring in Business Administration.

I later undertook further studies at Edith Cowan University where I graduated with a Master of Business Administration (MBA) degree in International Business.To further my management skills, I pursued an Advanced Management Programme with International Institute for Management Development (IMD).

On a personal level, I am very passionate about education and youth mentorship as well as Africa’s start-up eco-system and supporting young entrepreneurs to succeed.My other passion points are around talent development and gender diversity as well as running the business in a way that is sustainable and delivers value for our stakeholders. In addition, I am very inspired by the critical role of technology, innovation and digitization in the financial services industry.

In summary, it has been a long and rewarding career journey with Absa Group in Kenya and internationally, which means I have experienced all the key developments of in financial sector – branch expansions, branch closures, mobile disruption, fintech integration.

• Over your 28 years in the financial sector, you’ve held various executive positions within Absa Group. Could you highlight some of your key achievements or milestones that you’re particularly proud of during your career at Absa?

As the Chief Operating Officer of Absa Kenya, I am proud of the tremendous progress we attained in our automation and modernisation agenda which significantly enhanced our processes and system efficiencies resulting in robust customer service and experiences. I also look back with immense pride for being a part of the team that spearheaded the very ambitious retail expansion programme in Zambia that saw the number of banking branches double over a short period of time.

I am also particularly proud of the work we did to grow Absa Bank Tanzania into an inspiring and vibrant organisation that delivered faster than market growth and superior shareholder returns. I am also proud that we were able to successfully deliver the historic corporate rebranding programme to the Absa brand in 2020.

But perhaps my proudest moment was the opportunity to come back from Tanzania to lead Absa Kenya which has been my professional home for a long time. I am excited about the opportunity to contribute towards the success of Absa Kenya’s growth story, building upon the strong foundation and legacy that has been established over the years.

• As the CEO and MD of Absa Bank Kenya Plc, what strategic direction do you envision for the bank under your leadership, and what areas do you aim to focus on to drive growth and success?

For a start, the bank is performing strongly with one of the strongest growth rates in the market. As an example, the bank reported net earnings of Kshs.12.3 billion for the nine months ended 30 September 2023, a 15% increase over the same period last year, driven by double digit revenue growth across core business segments.For the period, the Bank recorded a 20% growth in revenue to Kshs.40.2 billion underscored by balance sheet momentum as we continued supporting individuals, business and corporate customers play their rightful role in the country’s economic growth and development.

As Absa, our strategic direction is anchored on our corporate purpose, which is to empower Africa’s tomorrow, together…one story at a time. We live our purpose through our commitment to our customers, our colleagues, and the communities we operate in.

We are currently implementing our refreshed strategy whose priorities are to be a modern-day consumer financial services business, a market leader in business banking, and a powerhouse Corporate and Investment Bank.

To achieve this, we focus on being a home of talent and diversity, a trusted brand driving a sustainable future, and a digitally powered business. As such, our customers can expect sustained innovation aimed at delivering more convenient and cost-effective solutions that holistically address their daily needs.

We are heavily investing in our capabilities from both a human capital and an infrastructure perspective to ensure that we provide locally relevant customer solutions and experiences.

For us, sustainability and ESG will continue to be a key differentiator in the way we do business. This is evident in our Sustainability Strategy, which has 13 commitments covering People, Profits and the Planet.

Looking at our current portfolio, for example, approximately 20% of our loans and advances is potentially eligible as sustainable finance. This year alone, we have advanced about KES60 billion in sustainable finance, comprising components of green finance as well as inclusive finance. Our ambition is to continue significantly expanding our investment in this space as we scale our support to sustainable development across all our economic sectors.

In line with this, we aim to double this figure to more than KES 120 billion in the next two years. You can therefore expect to see us playing an even bigger and bolder role, specifically in renewable energy, energy efficiency, green building, and climate smart agriculture sectors in the days ahead.

• How does Absa Bank Kenya Plc foster a culture of innovation within the organisation, and how do you plan to further encourage and support innovative initiatives moving forward?

For the last three years, Absa has been rated the top employer in Africa by the Top Employers Institute, which shows our commitment to continuously create a culture of innovation and entrepreneurship.Among others, today’s digital workplace calls for fresh ideas and innovative solutions. It goes without saying therefore that to meet these demands, organisations must constantly ensure their employees are empowered with the right digital upgrades in their skills.

It is on the back of this context that we are partnering in programmes like the Strathmore – Absa Financial Innovation Programme to provide our colleagues with the opportunity to upskill themselves in critical and nascent technologies such as cybersecurity, data science, automation and development operations, as well as business intelligence.

Our firm believe is that by offering specialised training in these areas, we are not only investing in the growth and development of our colleagues, but also equipping them with the right tools needed to contribute to Absa’s success in the digital age. This programme will empower our colleagues to directly apply their newly acquired skills to our ongoing initiatives and business challenges for the continuous growth of our business.

Empowering our workforce is an important aspect of nurturing a high-performance culture. We aim to enhance the capabilities of our colleagues by enabling them to become multi-skilled and deliver on their mandates. We strive to create a culture that encourages lifelong learning. Overall, we align our employees’ capabilities with their mandates so that they can deliver on our strategic objectives while also supporting their personal and professional development and growth.

• Small and Medium Enterprises play a vital role in the economy.What is Absa Bank Kenya Plc’s current approach towards supporting SMEs, and how do you plan to enhance this support during your tenure?

 As Absa, we recognise the major role that SMEs play in Kenya’s economy, contributing to 50% of the country’s Gross Domestic Product and 80% of employment, and are committed to being a partner of choice for SMEs.

As Absa, we have a four-pronged approach to supporting SMEs that encompasses access to information, access to mentorship and networks, access to local and international markets, as well as access to sustainable finance.This approach is premised on the recognition of the evolving role of banks from that of purely providing finance to that of being partners that facilitate businesses to grow.

We have also been focused on expanding our product offering in line with the prevailing economic cycles while expanding our physical and digital distribution channels to be able to better serve the needs of SMEs. The recent launch of the Wezesha Stock platform is one example of how we are now automating access to finance by digitally onboarding retailers, managing stock orders, and enable digital access to loan facilities.

• Could you share some examples of specific initiatives or programs that Absa Bank Kenya Plc has implemented to empower and uplift SMEs, both financially and non-financially?

 First, it is worth noting that Absa has been quite aggressive in providing financial support to SMEs in Kenya. As a demonstration of our commitment to SMEs, we have committed a further KES 100 billion to spur the development of MSMEs across various value chains over the next 3 years. The support we have committed aims to ensure that MSMEs have ready access to capital to always keep their operations resilient.

We also invest in partnerships that provide insights and knowledge to our SMEs to learn how to manage their businesses better while providing them with networking and market development opportunities to grow their businesses.Our partnerships with the Kenya National Chamber of Commerce and Industry (KNCCI), the International Trade Centre (ITC), and Melanin Kapital attest to our commitment to support SMEs.

Over the last 2 years, Absa has also held county business forums in partnership with KNCCI, which have impacted more than 10,000 SMEs countrywide, facilitating access to information, mentorship and networking opportunities, markets, and sustainable finance.We have proactively sought funding partners to support our inclusive financing agenda, enabling businesses that would need specific consideration beyond the normal banking requirements to access finance.

To empower women in business, we have been undertaking the Absa SHE Stars program – a collaboration between Absa, GIZ, and the Yunus Environment Hub (YEH). Since 2021, at least 1,300 women business owners have been equipped with entrepreneurial skills and knowledge such as the concepts of social business, circular economy, disruption management, business continuity, human resource management, investor readiness, and much more, boosting their productivity and competitiveness.

• The banking sector in Kenya has witnessed significant growth and innovation in recent years. How do you see Absa Bank Kenya Plc positioning itself to stand out in this competitive landscape and continue to be a leader in the industry?

 At Absa, we are collaborating closely with tech companies and fintechs as well as through the utilization of open APIs to drive innovation at a faster level as a way of delivering more differentiated customer experience both from a product and process perspective.

Additionally, becoming a digitally-powered business is one of the central part of our strategy to power the next phase of our growth. Whilst there may be customers who prefer non-digital interactions with us, a majority of our existing and new customers will prefer digital experience. We aim not to be left behind on the technology front and to not leave anyone behind. Therefore, we aim to advance digitally across board.

• Technological advancements have transformed the way banking services are delivered. Could you elaborate on Absa Bank Kenya Plc’s digitalisation strategies and how they contribute to providing seamless and convenient banking experiences for your customers?

 As Absa, we recognise the power of technology as an enabler for financial inclusion and superb service delivery to our customers. We are proud to be trailblazer in the journey of innovation, digitalisation, and automation as a bank of many firsts in our market. This is a true reflection of the innovative and forward-looking nature of the bank.

As I have just highlighted, one of our strategic priorities is to be a digitally Powered Business. This means that the customer should expect digital end-to-end delivery of our services from front end to back-end operations.

To achieve this, we have sought to create value and convenience for customers through new products and services, upgrades in technology, tailored value propositions for customer segments, increased system stability and uptime, digitisation of customer processes and proactive engagements with customers.

Over the last couple of years, we have invested over KES5 billion in several technology projects that enable convenient and accessible financial services, significantly boosting customers’ banking experiences. As a result, customers can now open Absa accounts remotely via the internet or smartphone at any time and from any location, and begin making transactions immediately from their new accounts without visiting a branch. Our significant expenditures in technology are primarily geared at improving the customer experience via digital channels and customer-facing services.

• Financial inclusion is a critical goal, especially in emerging economies. What role does Absa Bank Kenya Plc play in promoting financial inclusion, and what efforts are being made to ensure that a broader spectrum of Kenyan citizens can access banking services?

 In keeping with our purpose, we are constantly working to foster financial inclusion and enable individuals to meet their financial aspirations.We continue to improve our customer value propositions through enhancements to our diverse delivery channels and launching new products that address the diverse needs of our customers.

One of how we are roping in more Kenyans to access our banking services is through our digital platforms. We have created a digital onboarding solution for our retail banking customers. We also have a digital savings product to help them save and invest with ease.

Our mobile banking platform, Timiza has been a critical enabler of financial inclusion. Mark you, Timiza users can be both Absa Bank customers and non-Absa Bank customers. Today, one can withdraw their money on Timiza through any Absa Bank ATM across the country. Timiza customers can also conveniently make payments and access insurance through their mobile banking wallet.

On the lending front, we have availed over KES 65 billion in short-term loans to date through Timiza. During the first half of the year, we advanced KES 9.3 billion in loans through the platform.

Apart from the digital channels, we are also enhancing our agency banking service to allow retail and business customers greater access to our banking services within their localities without having to visit an Absa branch.

Women and the youth are also a key component of our financial inclusion agenda. In early 2020, the bank launched the SHE proposition for women in business and set aside KES 10 billion to bolster access to credit by women entrepreneurs over five years.

Through Absa’s Ready to Work programme, we have also trained over 245,000 youth to empower them with money management and entrepreneurial skills as they transition into the world of work.

• In your view, what are the key challenges that SMEs in Kenya face, and how does Absa Bank Kenya Plc intend to address these challenges through its products and services?

Lack of access to credit has been one of the greatest impediments to growth for SMEs. This has been partly attributed to the lack of collateral by most SMEs. Another significant challenge hindering the progress of MSMEs is the prevalence of informality entities operating without formal structures.

We are addressing these and other challenges through our four-pronged approach, which I explained earlier, as well as through continuous innovation on our solutions.

We have also entered into partnerships that complement our solutions. For instance, in order to help build the credit profile and formalise the operations of SME customers, Absa Bank Kenya last year inked a Sh1.25 billion Loan Portfolio Guarantee partnership deal by signing a Facility with the African Guarantee Fund (AGF). This initiative aims to boost credit accessibility for small businesses, including start-ups.

We are also addressing the knowledge and information gap that SMEs in Kenya often face through various programmes that have been initiated through partnerships with organisations that share our passion to empower SME owners.

• Looking ahead, what is your long-term vision for Absa Bank Kenya Plc? How do you see the bank contributing to the financial sector’s growth and the overall well-being of the Kenyan economy?

As Absa Bank Kenya, we want to become a consumer financial services business that is fit for the modern-day, while acknowledging that ‘modern-day’ is a moving target, that every day we will benchmark our consumer business to what the market offers and what consumers need, at that moment, and continuously ensure our business is connected to the present.

Charting a long-term vision in today’s dynamic business world demands a deep understanding of shifting trends and an unwavering commitment to meet the needs of the people we serve. Moving forward, we are committed to developing more holistic propositions that speak to the varied day to day transactional needs of all our customers. We will remain focused on delivering value to our customers, shareholders and communities while collaborating with all stakeholders towards the sustainable growth and development of our economy.

• Finally, could you share a message with the customers, stakeholders, and the broader community about your commitment to leading Absa Bank Kenya Plc into the future?

 My message to our customers, stakeholders, and the broader community is that as Absa, we acknowledge that the success of our business and society are intertwined. This is what underpins our shared value approach, which recognizes the interconnected nature of the needs of society and the bank’s interests and encourages us to always answer to a greater purpose beyond the bottom line.

We are committed to finding new ways to innovate and contribute to sustainable and value-creating solutions to the country’s most pressing socio-economic, environmental and societal challenges. We will be there when our communities, employees, and clients need us the most.

We look forward to working with like-minded partners who share our vision of creating a more prosperous Africa for all. Ultimately, we have a long-term interest in empowering Kenya’s progress, together… one story at a time.