An intern who came back to stabilize Postbank

Raphael Lekolool, the current managing director at Postbank still has the bank's savings card he took while in high school over 30 years ago.

He believes that the bank still holds key to the country's saving culture. Kenya's saving rate is at 12 per cent, way below Africa's average of 17 per cent.

This is half of the average for low-income countries (26 per cent of GDP). By contrast, neighbouring Uganda and Tanzania have already crossed the 20 per cent mark even though their per capita income is significantly lower.

''We are on a mission to transform the bank beyond its former glory. It is a year since  I took over, we are headed in the right direction, both for the bank's stability and our cardinal role to encourage the saving culture,'' Lekolool told the Star in an interview. 

Unlike other commercial banks in Kenya that are licensed and regulated by the Central Bank of Kenya, Postbank is regulated by the Kenya Post Office Savings Bank Act Cap 493B.

It is a premier saving and financial service bank providing quality banking and other financial services through innovations that build sustainable customer relationships and stakeholder value. 

The bank was delivering well on its goals, holding up to Sh12 billion in saving deposits by 2008, the high operation cost and extreme competition in the market started taking a toll on its earnings.

For instance, the bank spent Sh2.6 billion in administrative and operational costs against the projected Sh2.34 billion in revenue in the financial year ending June 2020.

To correct this anomaly, the bank's board tapped its former trainee Raphael Lekolool to redeem the institution from systematic losses. 

His primary duties were to develop a strategy that would answer its cost efficiency and management plans, financial and operational restructuring as well as asset restructuring by way of unlocking the value of non-performing ones. 

Revival

Just a year into the role, Lekolool has managed to drastically cut operational by 30 per cent and engineered infrastructure sharing by other lenders including NCBA Bank, First Community, Housing Finance, UBA, Absa and Oriental Bank. 

''We have availed our expansive infrastructure to other leaders in the market. Our agency banking services allow any member of the above-listed banks to transact at our over 104 branches across the country,'' Lekolool said. 

He said that the Kenyan financial sector is undergoing dynamic transformation thus creating the need for alternative delivery channels to promote easy access to financial products and services.

He added that the dynamism in the banking sector allows for innovation and collaborations as banks seek different ways to meet the needs of different market segments. 

It is planning to turn all post offices in the country into banking agencies akin to M-Pesa, a move that will expand its network and enhance service delivery even as it looks towards introducing lending services. 

Prior to his appointment, Lekolool was the enterprise risk manager at UAP, Old Mutual and head of internal audit at Faulu Microfinance Bank.

He is an MBA graduate of Cardiff Business School and holds a Bachelor of Science Degree in banking from the University of Manchester.

Nurturing saving culture among youths

Postbank Kenya has been at the forefront in running financial literacy programmes for both in-school and out-of-school youth.

Students in universities and colleges become empowered through sessions on financial literacy, entrepreneurship and enhancing soft skills in the workplace. 

For those out of school, the programme equips youth with entrepreneurial skills to start and run small businesses in line with their interests and passions.

Since the onset of these initiatives, youths have been able to set financial goals and work towards them.

''Most of the youths involved in the PostkBank effort have been able to set up small businesses ranging from agri-business, online stores and Boda Boda operations,'' Lekolool said. 

As an incentive to customers, interest earned by PostBank depositors is exempted from 15 per cent withholding tax, making it a better saving vehicle compared to other banks regulated by CBK. 

The bank is also wholly owned by the government, making depositors' funds more secure just like government bonds and bills. 

Just like other years, the bank is among sponsors of this year's International Youth Week, lining up a series of sensitization activities and training on saving. 

The bank attributes Kenya's poor saving culture to high spending power, especially by young people who follow international trends closely, thanks to the country's technological advancement.

''We have to reverse this trend. If we save enough, we will be able to even lend to the government and locally fund our infrastructure. It can be done,'' Lekolool said.