Faulu Microfinance Bank to close six branches, focus on digital road – Business Daily
A Faulu Microfinance bank in Nyeri. FILE PHOTO | NMG
Faulu Microfinance Bank will close six branches in April next year, becoming the latest financial institution to trim its physical branch network amid increased investment in digital banking services.
The branches to be closed are Gikomba, Limuru, Nanyuki, Kiserian, Homabay and Bondo.
Faulu said in a statement that customers currently served at these outlets will be moved to the OTC, Kawangware, Nyeri, Rongai, Migori, and Ugunja branches respectively.
“Operations in the affected branches shall cease with effect from close of business April 14, 2023,” said the microfinance institution in a notice.
“We encourage our customers to visit us at any of our other banking outlets or transact using our alternative channels which include: Faulu agents, DigiCash App, mobile banking … and using the Faulu Visa Debit Cards.”
Trimming of the branch count is expected to significantly cut rent expenditure as customers are pushed to digital platforms such as mobile banking.
It was not immediately clear if the closure of the four branches will result in job losses as has been witnessed among other financial institutions that have taken this route.
The planned closures at Faulu follow a similar decision last year when the microlender shuttered outlets in Nakuru, Taita Taveta, Meru, and Kirinyaga.
Faulu previously reported that it had 56 branches and 630 agents serving 480,000 customers drawn mainly from the civil service with some entrepreneurs in retail, agriculture, and manufacturing sectors.
Other lenders that have closed branches in recent years include Absa Bank Kenya and Standard Chartered Bank Kenya. Financial institutions are investing heavily in mobile and internet banking on, which a majority of transactions are now executed.
Major banks have said over 90 percent of transaction volumes now occur on digital platforms, reducing the need for opening new branches and in some cases resulting in the trimming of excess physical outlets.
Some institutions, however, continue to expand selectively to address market gaps, with branches seen as critical for new customer acquisitions, especially for retail-focused institutions. NCBA Bank and Co-op Bank are among the few financiers that are still expanding their physical footprint.
NCBA earlier announced it would open 12 new branches in Kenya this year as part of its local and regional expansion.
Co-op Bank also announced it would open seven new branches in the country this year, expanding its physical presence in areas it sees opportunities to grow its customer base.
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