The Bank That Started As A Shield For Farmers Hits 40 With Diversity

Getting a business loan is hard. But in the 80s, it was not hard; it was a nightmare at best and impossible at worst, with the latter being more likely. A cocktail of hurdles made it hard to access credit, from a lack of credit-scoring tools for lenders to loss regulation for the sector.

It, therefore, came as no surprise that the banking industry witnessed a near collapse in 1986 after shaky lenders fell one by one like a stack of dominos. The government’s response was swift and stern. It stabilized Kenya’s finance system but at the cost of lending to businesses, especially Micro and SMEs.

But in this chaotic era, Titus Muya stood out as a visionary who dared to dream big and buck the trend. In 1984, he set out on a path that in less than four decades would create one of Kenya’s largest banks, serving millions of customers, especially SMEs.

Muya founded Family Bank, initially known as Family Finance Building Society Limited, which provided micro-loans to small-scale farmers and business owners, from as low as KES 200.

The building society first set up shop in Nairobi and then branched into the dairy and coffee-growing areas of Githunguri and Gatundu. Gradually and sustainably, it grew while sticking to its roots of enabling SMEs to thrive by giving them access to much-needed credit.

The pivotal point came in 2007, during the economic boom of the Kibaki regime. In May 2007, the Central Bank of Kenya licensed Family Bank, and with the banking license, it ushered in a new wave of investors who provided substantial capital, enabling the nascent bank to pursue aggressive growth.

As of September 2024, Family Bank had KES 164 billion in assets, 95 branches in 32 counties serving 1.2 million customers, the majority of whom are small and micro-businesses that contribute 56% of total deposits and made up 66% of all loans.

This customer base comprises SMEs in general trade, agribusiness, Water, Sanitation and Hygiene (WASH), education, healthcare, and Chinese banking customers.

The bank has done and has been recognized at the industry’s Oscars, the Banker Africa East Africa Awards, where Family Bank was recognized as the Best SME Bank in Kenya in 2017

Additionally, in 2023, Family Bank was recognized for having the best internal customer experience in Kenya in the ICX Service Excellence Awards. It was also awarded as the Top Tier II Bank in customer experience at the KBA Awards.

But more importantly, it has been recognized for outstanding service by its 1.2 million customers, some of whom have been faithful for 40 years.

Next, we will explore the bank’s roots in Kenya’s agriculture sector.

Read Also: Family Bank Relocates Kisii Branch, Banks On Accessibility