CRDB Bank receives nod to join scramble for a piece of Congo’s market

CRDB Bank Plc has finally been granted a license by the Central Bank of the Democratic Republic of Congo (BCC) to provide financial services in the vast mineral-endowed East African country, the bank’s Group Chief Executive Officer (CEO) Abdulmajid Nsekela has disclosed.

The Central Bank of DRC also approved the appointment of Jessica Nyachiro as Chief Executive Officer (CEO) to oversee the CRDB Congo subsidiary and the Board of Directors to manage the operations in the country sending positive signals in the bank’s regional expansion drive.

CRDB Bank is entering the DRC market with two key partners including Norway’s Norfund and Denmark’s Investment Fund for Developing Countries (IFU).

Each of the two investors has 22.5 percent stake in CRDB Bank’s DRC subsidiary while CRDB Bank Plc has a 55 percent stake.

According to Nsekele, the granting of the license marks a significant achievement in CRDB Bank Plc’s regional expansion strategy milestone.

“This license will play a crucial role in stimulating competition in the financial sector in Congo. It will be instrumental in driving economic growth and improving the lives of people in the country,” Nsekela said.

Nsekela added, “This is our second subsidiary outside Tanzania as we initially established a subsidiary in Burundi in 2012 which has been in operation for 11 years now under the helm of our Managing Director Fredrick Siwale,”

CRDB is the only Tanzanian bank that has so far extended footprint in Congo and will now take on other East African Community (EAC) lenders KCB and Equity Bank for a pie of Congo’s lucrative market.

KCB Group paid KSh25.1 billion to acquire an 85 percent stake in DRC lender, Trust Merchant Bank (TMB), in a deal that has given it a foothold in the vast mineral-endowed country.

The lender disclosed the value of the deal in the latest annual report, which shows that the amount includes a goodwill (premium) of KSh3.07 billion in the transaction that values the DRC bank at KSh29.54 billion.

Equity Group became the first Kenyan bank to enter the DRC market following its acquisition of Banque Commerciale Du Congo (BCDC) in 2020.

In April this year, Equity announced that it would inject additional capital of $100 million into its BCDC subsidiary in an effort to strengthen its [the subsidiary’s] capital base.

Banks in the East African Community (EAC) are increasingly shifting their focus to the Democratic Republic of Congo (DRC) as they seek to exploit untapped potential in the newest member of the regional bloc.

With a population of almost 100 million people, the DRC – which is the second largest country by area in Africa after Algeria – has untapped deposits of raw minerals estimated to be worth in excess of $24 billion.

A study conducted by the EABC in 2019 indicated that the EAC bloc’s exports to the DRC stood at $855.4 million in 2018.

The DRC, however, remains dependent on the Tanzanian route to the sea, with Dar es Salaam Port handling the bulk of its imports and exports.