Commercial Bank of Africa (CBA) and National Industrial Credit (NIC Bank Group) are in talks for a possible merger, a development financial experts say will create one of the biggest banks in the industry, considering CBA’s position as Kenya’s second largest retail accounts holder after Equity Bank and NIC’s success in asset finance.
CBA’s partnership with Safaricom’s mobile savings and loan facility M-Shwari has catapulted the bank’s position in the country since it became institutionalised in Kenya a few years ago. Entering into another deal with NIC, which is the largest asset-financier, in the country will give it an upper-hand. Blogs, including Nairobitech, are abuzz with the story.
Although the talks are still ongoing, according to people familiar with the matter, what remains of interest is how M-Shwari, which allows M-Pesa users to save and secure loans at 12% interest, will be operated under the new bank.
CBA has been targeting high-end clients since it began its operations in Kenya. Its entry into mobile banking through the M-Shwari platform has seen it grow tremendously and NIC Bank will be looking to ride on this as the main reason for the merger.