Gulf African Bank: Why we don't lend to casinos, breweries

Gulf African Bank Manging Director Abdalla Abdulkhalik

What is the Bank’s involvement in women’s entrepreneurship? Why women?

Women are just a starting point. We will also go for youth at a later stage but we started with women because we think that it is an area that has not been given sufficient attention in this market. There is big opportunity to grow this segment. It is also a way of giving back to the community and empowering people who we believe can do better. We emphasize on women’s programmes and we will soon hold a forum in Mombasa that will bring together over 300 women in business. We intend to build capacity among our own people to see how they can start their own businesses. This is the only way to empower the community.

How does Gulf African Bank differ from other banks?

First of all the niche of Gulf African Bank is Sharia banking. It is not because we are concentrating on a particular faith. The whole concept of Sharia itself is fairness and ethical banking and also encouraging people of other faiths to explore what that fairness is about. It is not about beliefs or faith itself, we are not selling beliefs. We are selling a banking concept that conforms to Sharia but its underlying fact is that it is ethical and fair.

What are your expansion plans?

We want heavy representation in the whole country. Our aim is to be represented in almost every county but so far we are only represented in five counties. We are already planning to open up a branch in Eldoret in the month of August. A site has already been identified in Nakuru and hope to be there before the year ends. Between 2016 and 2017 we hope to open ten new branches. We have very ambitious plans for the local market.

You mentioned ethics; does the Kenya Banks Association (KBA) proposal to ban financing of projects that are not environmental friendly affect Gulf African Bank?

No, we follow that to the letter. Before even KBA gave that statement, we have a policy that we do not finance any project that is not friendly to the environment or even to our culture. We do not finance casinos, breweries and anything that is hazardous to the human body.

Banks’ core capital was raised from Sh1 billion to Sh5billion by 2019, how does that affect Gulf African Bank?

This was there in last year’s budget but it was not approved by both Parliament and Central Bank but I think this time it will go through. This is because now there is more reason why capital should be increased. The collapse of the two banks was not because they did not have enough capital, each of them was above Sh10 billion. Their failure was due to mismanagement and poor corporate governance. We are prepared to increase our capital which now stands at Sh3.8 billion and at the end of the year we will be way above Sh4 billion. By 2017 we will be above Sh5 billion.

Has confidence of the banking sector returned after the collapse of two lenders?

It has returned but not fully. With the introduction of the new capital requirements and guidelines issued by the Central Bank we will see strengthening of the industry and the restoration of confidence. It is encouraging mergers and acquisition of banks to make fewer stronger banks rather than having the number of banks we have today with so much weaknesses. Changes are coming, the situation will prevail for some time but we are definitely turning around.