Commercial banks are increasingly targeting churches and other faith-based organisations with financial products in a bid to earn from the billions of shillings generated through tithes, donations, offerings and investments in sectors such as education, real estate, health and hospitality.
A number of banks have moved to tap religious leaders to lead their strategy in capturing the market of faith-based institutions.
Equity Group recently opened the search for a head of faith-based sector whose main job will be to build and sustain a rapport with religious institutions.
Among the key qualifications for the role is a Bachelor’s degree in theology, in addition to having served as a bishop, pastor, priest, catechist or reverend within the past five years.
“The purpose of the role is to build and sustain a rapport with churches and religious institutions. The key responsibility is; customer acquisition, retention, and income generation from the sales of the bank’s products,” says the job advert.
Equity becomes the latest lender to train its sights on the increasing number of religious institutions in the country. Banks see churches as a fertile ground for growth by banking their tithes and offering, boosting their deposit base.
They also see room to fund the expansion of church buildings and their growing investments such as schools, hotels, restaurants and hospitals.
The attractiveness of religious groups to banks has been enhanced by their evolution from informal groupings into modern institutions with organised governance structures. Major churches such as Christ is the Answer Ministries (Citam) keep books of accounts that are audited externally.
KCB Group was in March this year recruiting a senior relationship manager for faith-based organisations to target churches and other religious groupings with “innovative and customised financial solutions.”
The bank said the ideal candidate should, among other qualifications, have at least five years of experience and be holding a senior position in a faith-based entity.
“The [holder of the] position will be responsible for the management of a designated portfolio of faith-based organisations and their related entities to grow and achieve the revenue targets. This position will be accountable for effectively managing and growing the bank’s relationship and ensure competitive product offerings for the sector,” said the bank’s advert.
The bank added that the ideal candidate would be one who has demonstrated networks within churches and religious institutions and with a clear understanding of how these groups work and monitor developments in their operating environment both locally and internationally.
Financial accounts of churches such as Citam offer a sneak peek into the billions of shillings controlled by churches —something that lenders see as a good source for deposits for building their loan book.
Citam’s income, for example, increased by 23 percent to Sh2.31 billion in the year ended December 2023, with the church attributing this to increased tithe and offerings and a stronger US dollar that meant dollar receipts fetched higher value when translated to shillings.
The church’s income from business units increased by 4.0 percent to Sh782 million due to increased sales in units such as school uniform shops, business park, Kiserian farm and increased pupil enrolment in its schools.
The bookkeeping and the assets owned by churches have emboldened banks to give them loans. Citam, for instance, stepped up its borrowing from Co-operative Bank of Kenya —one of its principal bankers alongside KCB Bank Kenya and Stanbic Bank Kenya —to Sh634 million last year from Sh116 million the previous year. The loan’s security is its land in Kisumu, Karen and Parklands.
Co-op Bank said in an emailed response to our queries that it made a decision early on to build a faith-based foundation of the lender in the marketplace and this has seen it attract churches across the country.
“We launched the goodwill partnership account decades back dedicated to serving the unique needs of faith-based organisations. Indeed, the board of directors in August 2008 issued the declaration [that] ‘Co-operative Bank shall be the Kingdom Bank through which God will bless His people of Kenya’. This association has over time fostered a very close alignment with the unique needs of religious institutions,” said Co-op Bank.
With churches expanding and hiring staff, Co-op Bank even offers a church pension scheme—a unique scheme targeting staff working for religious or faith-based institutions.
The setup of Citam mirrors that of many other churches and religious organisations, which have attracted banks and telcos. Covid-19, for instance, hastened the switch to digital tithing and offerings, allowing banks and telcos to come in with payment solutions that earn them commissions.
Stanbic Bank Kenya and South Sudan chief executive Joshua Oigara says the Kenyan lender is investing in technology to be able to bank churches as well as the faith-based social groupings.
“You will see more investment from us. I must say that for us, it is early days. What we have mostly are the smaller institutions but it is an exciting space. It is not our largest strength today but we are putting in very specific actions, using technology to get those clients and there is no reason why we cannot do it within that space,” said Mr Oigara in an interview with this publication.
Other faith-based institutions are opting to set up financial institutions with focus on banking people within their shared values.
Such institutions are offering diverse financial products, including banking tithes for churches and issuing loans to support customers such as small businesses and individuals owned by their members.
The trend, which started with well-established churches such as Catholic and Anglican, has now spread to branches of these churches through the setting up of savings and co-operative societies.
The National Council of Churches of Kenya (NCCK), for instance, started SMEP Microfinance Bank in 1975 as a social support arm to assist the vulnerable. SMEP then grew into a deposit-taking micro-lender in 2010.
The Catholic Church, through the Archdiocese of Nairobi, started Caritas Microfinance Bank in June 2015. Caritas was born out of a self-help programme in which members of the church were saving and accessing credit. It has so far disbursed over Sh9 billion loans.
The Anglican Church of Kenya’s diocese of Kericho in 2016 partnered with Five Talents UK to start Kericho Community Development Trust –a microfinance programme that allows members to save and borrow.
The churches have also deepened their foray into the financial sector by starting saccos such as Waumini Sacco, Biblia Sacco, and Charismata Sacco to help their members to save and access loans at rates lower than those offered by commercial banks.
