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Too often do the statistics point to Micro, Small and Medium Sized Enterprises (MSMEs) and the staggering percentages that point to failure. Indeed, reflecting on such figures can be daunting to the budding entrepreneur. The Kenya National Bureau of Statistics (KNBS) did a survey in 2016 indicating the average lifespan of MSMEs is 3.8 years and 46.3% of them closed within the first year. But, a bigger issue in the offing is rarely pointed out. Several corporate giants have been falling and no statistic points to and at them. Fingers have been pointed to turbulent times in Kenya but such giants should weather boom and bust cycles. Fingers have also been pointed at lack of protection for local industries, more so counterfeit goods; true but protection can only last so long (case in point the highly “protected” sugar industry yet very uncompetitive).

As you dig deeper into the falling giants, what is revealed is a simple yet profound problem… Corporate Governance. Let’s dispense with what corporate governance is firstly. The cliché definitions will talk about structures and processes that govern (or direct) relationships amongst stakeholders. Not to underscore the importance of that definition but we must truly reflect on something deeper…

It is about Values

A value system that people truly believe in and uphold is indeed more valuable than structures and processes. Why value trounces structures and processes is that the latter can be circumvented the former is inherent. Therefore, to add to the definition of Corporate Governance we must include values; values that govern relationships amongst stakeholders. You may also wish to refer to these values as ethical business practices or core values that mould the culture within the said organisation. These values are mostly unwritten rules that people believe in.

So, how exactly do values, or lack thereof, contribute to success or failure of these giants? To demonstrate the importance of grounded values in business over structures and processes have a look at the banking industry. In the recent past, 3 banks have fallen… and not that there aren’t enough systems and processes. As a matter of fact, the banking industry’s regulator (Central Bank of Kenya) requires monthly reports from the banks. Again, two major retail chains in a similar period fell as well as a cement firm that is currently going into receivership.

It comes as a shocker to many that such large institutions can actually fail with so many regulatory checks. The problem, as earlier, is not the presence of structures and processes but a lack of values at the heart of the people. Once people, especially top management learn about the systems, structures and processes in place, they then look for loopholes. A good example is, which is what brought the banks down, careless insider lending, mismanagement of deposited funds and creation of fictitious reports. All these could have been avoided by values such as integrity. True, tighter rules come by after such incidents but one is left to wonder how an entire management team and further the board could come to be compromised.

What does the collapse of corporate giants mean? A collapse means stakeholders are affected. But too often do people assume who the stakeholders are. Most commonly looked at are the employees, the shareholders and creditors. Looking at a wider array of stakeholders underscores the importance of corporate governance in organisations. When a corporate giant falls, a deeper hole is left in the economy than is apparent. There is a multiplier effect to its collapse and is felt among the indirect stakeholders. Take for example a company employing 1,500 people collapses. It has been noted in our economy that a single salary could easily be the support of up to 20 people. So, you can see how 1,500 people can turn into a multitude of 30,000.

Few businesses are able to demonstrate proper forward and backward integration like large retailers, cement companies and especially banks. Forward and backward integration refers to the ability of a business to create other business up and down the supply chain. Betting companies, for example, do not demonstrate this. KNBS points out there are roughly 1.6 million MSMEs licensed by county governments which employ about 4 million people. So, if the businesses (MSMEs) created by the value chain of the corporate giant depend on it, then you are left to wonder how many of those that died were due to this carelessness. There’s also a big negative economic impact as the Government misses out on taxes.

To survive such falls, change must start from within. So far, we have addressed the giants, but such changes are also applicable to SMEs and the individual. Corporate malpractice in essence extends to malpractice by smaller businesses in the same value chain (compromise in business seems to have long tentacles). Businesses that base their model on values can outgrow current management and survive for generations. Businesses that have existed for centuries have values at the core of their operations. This then leads to sustainable businesses that positively impact the society by creating immense value along the supply chain.

This is what we want to see at Credit Bank; businesses that survive for more than 3.8 years and grow to create value chains of their own. Our new strategy places an emphasis on MSMEs as they contribute so much to the Kenyan economy (33.8% to GDP according to KNBS). SMEs however face a challenge of financial capacity to contract for bigger jobs thus fuelling their growth. As a financial institution, we fill the gap by enabling their financial capacity through funded as well as non-funded means. For this to happen, the SMEs need to establish sound operational practices. In essence, they need proper corporate governance in terms of structures and processes. More importantly are values they need to cultivate in their operations. Our sound governance values are the least we can impart on these MSMEs especially values of integrity and excellence. These values form part of who we are as an institution. Our mission reflects our desire to work towards and build an oft forgotten sector that in turn builds the economy.

The impact of sound corporate governance and clear strategy on MSMEs has transformed Credit Bank. We have been able to record growth over the past three years. This is noteworthy especially at a time when an interest rate capping law ensured most of the banks recorded losses or regression in growth. As demonstrated, direct and indirect stakeholders benefit greatly from existence of our institution. When we enable financial capacity of small businesses, other several indirect stakeholders benefit including creation of other subsequent businesses. To be able to continue to serve in the longer term, we must continue to base our practices on values… sound corporate governance.

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Empowering you to grow takes a special place at the heart of our operations. elev8HER is designed just for you and offers more than just financial solutions. We seek to be the friend you can bank on for your growth. Join elev8HER today and get exclusive access to:

  • ~elev8HER Community – a chance to market your business to others
  • ~elev8HER Health – activities such as walks, free check-ups and more
  • ~elev8HER Newsletter – with business insights and features a client each month
  • ~elev8HER Visa Debit Card – a card just for you
  • ~elev8HER Site – this comes with learning modules and expert opinions on various matters
  • ~elev8HER Café – features business moguls to learn engage and prosper

 

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HER Car Insurance

 

With elev8HER, we have curated our motor vehicle insurance options just for you. We have the following options:

  • ~HER Private Motor Vehicle Cover – this covers all vehicles used for personal, social and pleasure purposes.
  • ~HER Commercial Vehicles – this cover is for all vehicles used in the line of doing business.

This insurance cover indemnifies you in respect of accidental damage including collision, fire, theft of the vehicle and third party liabilities.

 

HER Business Insurance

 

This is a comprehensive insurance that covers your property against any accidental and unforeseen loss or damage. It offers a wide range of unique benefits depending on your needs. The following policies are available under this class among others:

  • ~Fire and Allied Perils (Burning flame, explosion, impact, flood, malicious Damage)
  • ~Burglary policy including holdup
  • ~Cash in transit/Goods in transit
  • ~Home Insurance (Domestic Package) – Sections A,B,C,D, E & F
  • ~All risks
  • ~Fidelity Guarantee policy
  • ~CAR
  • ~WIBA

 

HER Health Cover

 

This cover is suitable for you and your employees. You can now have peace of mind together with your employees with our medical cover. Credit Afya Health product is designed for both individuals and SMEs and offers the following:

  • ~Inpatient and outpatient cover
  • ~Various memberships for free – Mums Club, Senior Club, Maisha Fit among others
  • ~Terms and condition will vary for different clients and different requirement.

 

HER Travel Insurance

 

Travelling the world? This cover is for you if you are travelling for leisure or business and offers you the following:

  • ~Emergency Medical and related expenses
  • ~Loss of Baggage
  • ~Travel inconveniences
  • ~Personal accident

The cost of this cover is normally dependent on number of days of travel, country of destination, country of destination, your age and type of visit.

eHub

eHub is a platform designed to enable your small and medium sized enterprise (SMEs) scale and become competitive across industries. eHub provides a platform for you to network, learn and do business. Non-financial service package include access to e-hub for free/discounted rates:

  • ~Access to eHub Accelerator programs
  • ~Access to eHub Circles
  • ~Access to eHub Mentors
  • ~Access to eHub Masterclass
  • ~Access to eHub One on one coaching sessions
  • ~Women Café – monthly talks on pertinent issues affecting women in business and women in general

Learn more here.

 

Financing Options

HER Business Loan

If you have run a small and growing enterprise for at least three years, this term loan is designed to meet your financing needs.

What You Get
  • ~Access loan value of up to KES 10 million
  • ~Preferential interest rate
  • ~Last two months interest rebate upon full redemption of loan and consistent repayment with no incidence of arrears.
  • ~Access to other elev8HER products such as insurance packages with discounted premiums, and non-financial service package including access to eHub for free

 

HER Start-Off Loan

 

If you have run a micro and small enterprise between one and three years, this term loan is designed to meet your financing needs.

 

What You Get

 

  • ~Access loan value of up to KES 3 million
  • ~Preferential interest rate
  • ~An unsecured option is available
  • ~Last two months interest rebate upon full redemption of loan and consistent repayment with no incidence of arrears.
  • ~Access to other elev8HER products such as insurance packages with discounted premiums, and non-financial service package including access to eHub for free

 

HER Trade Loan

 

Sometimes cashflows are tight. This solution is meant to ease your cash operations in the short term. Access this financing with your LPO/LSO contracts. Open an elev8HER account for business transactions to build your business banking record.

 

What You Get

 

  • ~Get up to 70% cash value on your LSO/LPO contracts
  • ~If you have an invoice yet to be paid, our Invoice Discounting offers up to 70% cash value
  • ~Access training and coaching through eHub and other non-financial services .
  • ~Access to other elev8HER products such as insurance packages with discounted premiums, and non-financial service package including access to eHub for free as above

 

Her Digital Loan (Women Pre-Approved Cash Loan)

 

Need quick cash? CB Konnect, our mobile banking app, gives you access to quick loans based on your transaction history with no security required.

 

What You Get

 

  • ~No collateral required
  • ~Access to other elev8HER products such as insurance packages with discounted premiums, and non-financial service package including access to eHub for free as above
Account Options

HER Personal Account features:

  • ~No Monthly Charges 
  • ~Minimum operating balance Kshs. 2000
  • ~Charges via Digital Channels apply

HER Business Account features:

  • ~Get unlimited access for a flat monthly fee of KES 500
  • ~No charges for Cheque Book

  • ~Access to a Visa Debit Card*

  • ~No minimum or operating balance
  • ~Charges via Digital Channels apply