Africa-Press – Kenya. Faulu Bank has entered into a mutual partnership with the Non-Governmental Organization Council, in a bid to mobilise deposits, as well as grow its Non-Funded Income Line.
The lender is banking on long-term and sustainable strategies that will ensure the growth of its Current and Savings Account (CASA) and NFI line, management said on Friday.
“Signing of this Memorandum of Understanding today will offer us an opportunity to support the council in capacity development and providing financial literacy to NGOs and Community Based Organisations (CBOs) while advancing our products and service to the NGO sector,” said Faulu Bank CEO, Apollo Njoroge.
On the flip side, the council will support the bank by ensuring that it partners with as many NGOs as possible and onboard them to enjoy the benefits of its Imani Account – a product customised for NGOs, CBOs, and churches.
The account offers interests of up to five per cent for an account balance of Sh10,000 and above, in local currency.
This is besides allowing access to competitive fixed deposit rates, access to salary processing, first free checkbook, and its available in local and foreign currencies.
“As a council, we have been having discussions with the bank and in the process expressed our desire for them to be pivotal in supporting and complementing the work that the NGOs are undertaking within the country,” NGO Council chairman Samuel Githinji said.
“We are positive to support Faulu in any way we can to ensure that they partner with as many NGOs to achieve their mandate of capacity building through financial education,” he added.
Currently, there are over 11,262 registered NGOs in the country that pursue various charitable purposes out of which 8,893 are active.
In 2018/19, NGOs received a total of Sh165.97 billion which was an eight per cent increase from the previous year.
88 per cent of these funds were raised from sources outside Kenya.
Total expenditure for the NGOs was Sh172.1 billion, representing a 15 per cent increase from 2017/18.
On project implementation, NGOs spent Sh78.8 billion in various parts of the country.
The bulk of the project expenditure was on health, HIV/AIDS, education and relief/disaster management at Sh13.0 billion, Sh10.6 billion, Sh9.4 billion and Sh8.8 billion, respectively.
Most charities implemented projects in areas with good infrastructures, such as Nairobi, Kiambu, Kisumu, Nakuru and other urban centres.
Findings by the Bank show that CBOs are doing more work in the community and as of 2020, it’s estimated that they utilized Sh12.3 million in terms of project funding.
There is potential for the bank to open over 100 NGO accounts, mobilize over Sh150 million in deposits at rates lower than one year T-bill rate and earn over Sh2 million in foreign exchange income.
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