KCB and CBA seek to enter Somalia banking market

30 May 2016 | by
KCB and CBA seek to enter Somalia banking market

Two local banks are among 12 international lenders that have applied for licences to operate in Somalia, the country's Central Bank governor Bashir Ali has said.

Kenya Commercial Bank and Commercial Bank of Africa are seeking to set shop in Somalia, although the country has faced a two-year moratorium on licensing new banks to enable the financial and banking systems stabilise, said Ali.ÔÇťOthers are from the gulf region... we are cautious though, in case a bank opens shop, collects deposits and runs off," he said.

Only six banks currently operate in Somalia,whose security situation has improved in recent years according to Ali.He assured those eyeing the market that the stay on licensing new banks will be lifted once the situation improves further.

New entrants will however not be allowed to operate solo but will instead open subsidiaries in partnership with local investors or the existing banks.He was speaking on Friday when the bank received $2.5 million (Sh250 million) from a group of donors including the World Bank to set up a robust IT platform.

The platform known as the Financial Accounting Controls and Transaction System is being implemented by consultant Sofgen, which has also set up IT systems for various lenders in Kenya.

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