Commercial banks are increasingly targeting churches and other religious organisations with financial products in a bid to earn 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 enlist religious leaders to lead their strategy to capture the faith-based market.
Equity Group recently opened a search for a Head of Religious Institutions, whose main task will be to build sustainable relationships with religious institutions.
Key qualifications for this role include a Bachelor of Theology degree, as well as having served as a bishop, pastor, priest, religious teacher, or chaplain within the past five years.
“The purpose of this role is to build strong relationships with churches and religious institutions. The primary responsibility is to acquire and retain customers and generate income from sales of the bank’s products,” the job posting reads.
Equity has become the latest lender to set its sights on the nation’s growing number of religious institutions. Banks see churches as a fertile ground for growth through tithing and giving, which boosts their deposit base.
They also see room to finance 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 congregations into modern institutions with structured governance structures. Megachurches such as the Church of Christ is the Answer Ministries (CETAM) maintain externally audited books of account.
In March of this year, KCB Group appointed a Senior Relationship Manager for Faith-Based Organizations to target churches and other religious groups with “innovative and personalized financial solutions.”
The bank said the ideal candidate should, among other qualifications, have at least five years of experience and hold a senior position in a religious-based entity.
The bank’s announcement said: “The position will be responsible for managing a defined portfolio of religious organizations and their associated entities to grow and achieve revenue targets. The position will be responsible for effectively managing and growing the bank’s relationship and ensuring competitive product offerings to the sector.”
The bank added that the ideal candidate would have networks within churches and religious institutions and a clear understanding of how these groups operate and monitor developments in their operating environment locally and internationally.
The financial accounts of churches like Sitam’s provide a glimpse into the billions of shillings controlled by churches – which lenders see as a good source of deposits to build their loan book.
For example, SITAM’s income rose by 23 percent to Sh2.31 billion in the year ended December 2023, with the church attributing this to increased tithes and offerings and a stronger US dollar which meant dollar receipts had a higher value when translated into shillings.
The church’s income from business units rose by 4.0 per cent to Sh782 million due to increased sales in units such as school uniform stores, commercial park, Kiserian Farm and increased pupil enrolment in its schools.
The churches’ accounting and assets have encouraged banks to lend to them. For example, Sitam increased its borrowing from the Co-operative Bank of Kenya — a major lender alongside KCB Kenya and Stanbic Bank Kenya — to Sh634 million last year from Sh116 million the year before. The loan is secured by its land in Kisumu, Karen and Parklands.
Co-op Bank said in an emailed response to our inquiries that it made an early decision to build a faith-based lender in the market and that has attracted churches across the country.
“We launched the Charitable Partnership Account decades ago, dedicated to serving the unique needs of faith-based organizations. In fact, in August 2008, the Board of Directors declared that ‘Cooperation Bank will be the Kingdom Bank through which God will bless His people in Kenya.’ This association has over time fostered a close alignment with the unique needs of faith-based organizations,” said Cooperative Bank.
As churches expand and employ staff, Co-op Bank also offers a Church Pension Scheme – a unique scheme aimed at employees who work in religious or faith-based institutions.
The creation of Citam mirrors the creation of many churches and other religious organizations, which have attracted banks and telecoms companies. For example, COVID-19 has accelerated the shift to digital tithing and offerings, allowing banks and telecoms companies to offer payment solutions that earn them commissions.
Stanbic Bank Kenya and South Sudan CEO Joshua Oigara said the Kenyan bank is investing in technology to be able to handle churches as well as faith-based social gatherings.
“You will see more investment from us. I have to say we are still in the early stages. What we have is mostly smaller institutions, but it is an exciting space. It is not our biggest strength today, but we are taking very specific actions, using technology to get those customers, and there is no reason why we cannot do that in this space,” Mr. Oigara said in an interview with this publication.
Other religious institutions choose to create financial institutions that focus on providing banking services to people within the framework of their shared values.
These institutions offer a variety of financial products, including banking tithing for churches and issuing loans to support clients such as small businesses and individuals owned by their members.
This trend began with the established churches such as the Catholic and Anglican churches, and has now spread to the branches of these churches through the establishment of savings societies and cooperatives.
For example, the National Council of Churches of Kenya started the Microfinance Bank SMEP in 1975 as a social support arm to help vulnerable groups. SMEP was transformed into a deposit-taking microfinance institution 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 where church members saved and accessed credit. It has so far disbursed over N9 billion in loans.
In 2016, the Kericho Diocese of the Anglican Church of Kenya partnered with Five Talents UK to start the Kericho Community Development Trust – a microfinance programme that allows members to save and borrow.
Churches have also delved into the financial sector by establishing charitable societies such as the Waumeni Society, the Biblia Society and the Charismata Society to help their members save and obtain loans at lower rates than those offered by commercial banks.
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