Is Timiza part of Absa’s plan to deliver African Banking
For Barclays Kenya, Timiza represents close to four million new virtual bank branches, pushing out loans of up to Sh13 Billion since inception. The micro-lending platform helped push Barclays Kenya operating profits up by 13 percent to Sh6.2 billion during half-year 2019, representing the fastest growth in 7years.
When Barclays Kenya cut down its branches from 91 to 85 it seemed like a risk, but the strategy has proven that the bank is more in sync with the people it intends to serve.
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Barclays Kenya which will rebrand to Absa Kenya by early next year is the first subsidiary out of a family of other Absa subsidiaries in the continent that offers a mobile-based micro-lending platform that also offers various insurance propositions and bill payment features.
Spread across 12 countries, Barclays Africa under the Absa Group umbrella is now valued at Sh1 trillion at the Johannesburg Stocks Exchange. With such deep pockets, this will allow the lender to make very aggressive investments if they offer good returns, Timiza is one of such investments.
With total assets of Sh9.3 trillion, Absa Group’s value surpasses the Sh7.4 trillion Kenyan GDP, which is all the goods and services produced in the country. The Bank group takes care of 39763 workers across the continent and has 1,094 branches and 9886 ATM’s.
But just like the M-Pesa digital revolution, can Absa export Timiza to the rest of Africa? And with the exponential customer reach, what could this mean for Absa Group?
Without restrictions of Barclays PLC and a sizable balance sheet plus the experience, could Absa achieve the vision of its former boss Bob Diamond of the potential for banking in the African market?
Timiza is a virtual banking platform that operates from a mobile wallet as an equivalent of a current account. It tells you how much you can borrow and allows a customer to enjoy incentives for early loan repayment, which will depend on how much they use it.
For instance if you make regular payments from the platform, it increases the propensity of how much you can borrow, you can buy insurance, you can even hail a Little Cab on the platform.
The platform also allows you to repay loans early since most people and even small businesses who take these Micro-loans are only bridging as they wait for a windfall. It also allows you to send money within Timiza accounts for free, how about that.
It’s a Digital Proposition that can solve the infrastructure gap in Africa towards the bank of the future.
Such old moves have been met by skeptics about risk, but Barclays has a history on the continent with gauging risk. In Kenya, Barclays were the first ones to do SME lending without asking for audited financial statements.
The lender started by doing transaction analysis including M-pesa transactions, but has now graduated to a tech based analysis. The bank now leverages large scale robotics for services such as account opening, where they do all the processing, the criminal background checks, all the know your customer checks much more efficiently allowing them to manage risk in a much more efficient way.
The bank has demonstrated that this mode works, and since the new approach, Absa has shifted its focus to the youth by supporting 215,000 young people under its Ready-to-Work programme, sponsoring 540 other students and helping place 2,500 others within its ranks and partner institutions. Barclays is creating its captive market for the future.
Digital solutions, innovations such as Timiza are introducing new ways to reach new customers. The lender will also launch a goal-based savings feature that will reward all customers who reach their goal-saving
Barclays Kenya has been around for the past 100 years, and as it transitions to Absa Kenya, it offers valuable lessons on being the ideal bank for the next 100 years, the African bank on the palm of your hand.
