This article describes the case of the Kingdom of financial holdings of sustained growth in the case study. It was a start-up bank that survived the financial crisis that began in Zimbabwe in 2003. The bank was founded in 1994 and consists of four young entrepreneurs. It has grown and grown. The case examines the origins, growth and expansion of banks. Nigel Chanakira
Nigel Chanakira is trained in the Highfield suburb of Harare, an entrepreneurial family.
His father and uncle operated a public transport company, Modern Express, which later diversified into retail stores. Nigel's father later withdrew from the family business. He bought a shop and expanded it. During the school holidays, the young Nigel, as the first born, will work in the store. His parents, especially his mother, insisted on getting education first.
After graduating from high school, Nigel did not enter the dentist or medical school, this is his first passion. In fact, his grades would only qualify him for a Bachelor of Arts degree from the University of Zimbabwe. However, he "sweetly talked about his way into" a bachelor of economics degree course. Academically, he worked hard to capitalize on the strong competitive nature of his development during the sports day. Nigel rigorously applied his academic aspirations and passed his studies with excellent results, opening the door for economists at the Reserve Bank of Zimbabwe (RBZ).
In an economic idea with the Reserve Bank pointed out to him that wealth creation took place in the banking sector, so he was determined to understand the banking and financial markets. During his time at RBZ, he took a master's degree in financial economics and financial markets to prepare for his debut in the banking industry. At the Reserve Bank of Dr. Moana, who was part of a research team, the research team developed a policy framework for liberalizing financial services within the economic restructuring program. At the right time in the right place, he realizes the opportunity for openness. Nigel used his position to find the most profitable banking institution to prepare for his future.
Soon after, Bard's two black executives, Nick Vingirayi and Gibson Muringai, formed Intermarket Discount House. Their departure inspired the young Nigel. If the two can establish their own banking institutions, so he can, given time. The departure also created an opportunity for him to fill the vacancy. This gives the aspiring banker critical management experience. He then became Director of Bard Investment Services, where he gained key experience in portfolio management, customer relations and trading. Although he met Frank Kufa, a young dealer who was later to become a key entrepreneur in the wave, who would become a key entrepreneur with him
Despite his professional business involvement, his father recruited Nigel At Barclays Bank "Start Your Own Business" program. What really affected young entrepreneurs, however, was the EMPRETEC Entrepreneurship Training Program (May 1994), introduced by Mrs. Tsitsi Masiyiwa.
Nigel and Charles Gurney talk about a management acquisition of Anglo-Bard's Bard. This failed, frustrated aspiring entrepreneur to consider employment opportunities with Nick Vingirai's international market and never to set up a national discount house in Mhlanga – hoping to join as a shareholder as he was familiar with the promoters.
He resigned in October 1994 and pursued his entrepreneurial dream with the encouragement of Madame Masiyiwa, due to his frustration with the bard and his refusal to enter the club by the pioneers
Inspired by Pastor Tom Deuschle's speech, Nigel is frustrated by his inability to participate in the church's large-scale construction projects, seeking a way to generate enormous financial resources. During prayer, he claimed that he had a divine encounter with God from which he was empowered to start the Kingdom Bank. He visited his pastor and told him about the encounter and the subsequent desire to start the bank. The godly priest was amazed at the 26-year-old "big glasses and tennis shoes" that he wanted to start a bank. The priest prayed before counseling the young man. Believe that Nigel's dream of authenticity, the priest did an unusual thing. He asked him to testify to the congregation where God led him to open a bank. Although timid, young people observe. This experience is a strong vote of confidence by the godly priest. It proves the power of the mentor to establish a protégé
Nigel collaborates with the young Frankie Kufa. Nigel Chanakira left Bard in the position of chief economist. They will build their own venture venture. Their idea is to identify players with specific abilities and the ability to generate financial resources from his activities. Their vision is to create a one-stop financial institution that offers discount stores, asset management companies and commercial banks. Nigel uses his Empretec model to develop a business plan for their business. They chase Solomon Mugavazi, a stockbroker from Edwards and Company and B.R.Purohit, a corporate banker from Stanbeck. Kufa will provide money market expertise, while Nigel provides government bond trading revenue and team-wide oversight
Each new partner brings an equal share of S $ 120,000 as start-up capital. Nigel talks to his wife, who sells their recently acquired Eastlea home and vehicles to raise the equivalent of $ 17,000 as their initial capital. Nigel, his wife and three children returned to Heidfeld to live with his parents. Partners established Garmony Investment and began trading as an unregistered financial institution.
Mugavazi introduced and recommended a chartered accountant, Lysias Sibanda, to join the team. Nigel was initially reluctant because everyone had to bring in revenue, and it was not clear how accountants would generate revenue when financial institutions started. Nigel initially retained 26% of the shares, which guaranteed his voting rights as well as positions given to his controlling shareholder
Nigel will successfully motivate the Institute (SMI) curriculum "The Dynamics of Successful Management" , So that he can get management capabilities.
The Birth of the Kingdom
Kingdom Securities P / L became operational in November 1994 as a wholly-owned subsidiary of Garmony Investments (Pvt),
February 1995 24, Kingdom Securities Holding was born, with the following subsidiaries: Kingdom Securities Ltd, Kingdom Stockbrokers (Pvt) Ltd and Kingdom Asset Managers Ltd. According to the provisions of Chapter 25 of the Bank Law of July 25, 1995, the flagship Kingdom Securities Ltd is registered as a discount store. The Stockbrokers of the Kingdom were registered with the Stock Exchange of Zimbabwe on August 1, 1995 at ZSE Chapter 195. Income, but they still have a required capital deficit of 20%. Most institutional investors rejected them because they were a new company advocated as "too young". At this stage, national commercial banks, international markets and others raise assets in the market, which are run by seasoned and mature promoters. However, Zimnat's MD, Rachel Kupara, believed in the young entrepreneur and acquired the initial shareholding of Zimnat in a 5% share
At the time, First Mutual's CFO and investment manager, Norman Sachikonye, : Equity ratio of 15%. The two institutional investors were introduced on 1 August 1995 as shareholders of Kingdom Securities Holdings. Garmony Investments ceased to operate and converted to Kingdom Securities on July 31, 1995, thereby becoming 80% of the shareholders
marked by fierce competition and public organization discrimination against new financial institutions. All other operating units performed well, except for the financial department of Kingdom Securities, led by Purohit. This monetary loss, different moral and moral values led Purohit to be forced to leave as executive director and shareholder on 31 December 1995.
Nigel and his team have taken a proactive growth strategy aimed at increasing market share, profitability and geographic distribution while at the same time The development of a strong brand. The growth strategy is centered around simplifying financial services and making them accessible to the public.
On April 1, 1997, the Financial Services Corporation of the United Kingdom was authorized to serve as a trading and distribution firm specializing in foreign exchange, treasury, corporate finance, investment banking and advisory services. It was established under the leadership of Victor Chando to become the Group's commercial banking business. In 1998, British Commercial Bank (KMB) was licensed and took over the assets and liabilities of British Securities Limited. Its principal activities are financial-related products, off-balance-sheet financing, foreign exchange and trade finance.
Recognizing their limitations, the pioneering bankers try to quickly realize the critical mass by actively seeking equity injection by equity investors.The aim is to broaden ownership while providing strategic support in areas of common interest. Attempts to take equity from global emerging markets in London have failed. However, in 1997, bankers' efforts paid off, with the following organizations taking up some equity and reducing the shareholding of the executive directors as follows: éEilpen 0.7%, Zambezi Mauritius 1.1%, Zambezi Fund P / L 0.7%. ÉEUR Southern Africa Enterprise Development Fund - 8% convertible preferred stock, worth 1.5 million US dollars, as South America's first US fund investment by the US fund investment company, by the US President Bill Clinton, Richard Muirimi, a long-time partner of Nigel and an assistant to the fund management business, accounted for 71.7% of Garmony Investments' 1.7% executive directors. After EEUR, Zimnat dropped to 4.8%, while FML fell to 14.3%.
In 1998, the Kingdom launched four unit trusts, which proved very popular with the market. Initially, these products focused on individual customers of discount stores and the private portfolio of Kingdom Stockbroking. Active marketing and awareness activities make Kingdom Unit Trust the most popular retail brand in the group.
Discount Company of the acquisition of Zimbabwe
After the stimulation of organic growth, the kingdom of entrepreneurs decided to accelerate the growth rate of synergies. They began to buy the country and the world's oldest discount store, Zimbabwe's discount company, which is a listed entity. Through this acquisition, the Kingdom will gain critical capabilities, as well as through the reverse market to cheaply achieve the coveted ZSE listing. Initial efforts to merge with DCZ were rejected by their executives, who could not tolerate a four-year-old body swallowed by a four-year operation. Entrepreneurs did not stop. Nigel approached his friend Greg Brackenridge in Stanbic to finance and acquire a 60% stake in the hands of ten shareholders, representing the Kingdom of Financial Holdings, but was placed under the ownership of Stanbach Nominee. This strategy obscures the identity of the acquirer. Claud Chonzi, General Manager of the National Social Security Board (NSSA) and Lysias Sibanda (Executive Director of the Kingdom), agreed to play a leading role in the negotiations with DCZ shareholders. NSSA is a well-known institutional investor, so these shareholders may believe they are dealing with an institutional investor. Once the Kingdom controls 60% of DCZ, it takes over the company and reverses its listing on the Stock Exchange as the Kingdom Financial Holdings Limited (KFHL). Due to negative real interest rates, the Kingdom successfully used debt financing to build acquisitions.Other strategic acquisitions
In the same year, the Kingdom Merchant Bank acquired a strategic stake in CFX Bureau de Change, owned by Sean Maloney, and another greenfield microfinance franchise, Pfihwa P / Respectively. CFX is changed to KFX for most foreign currency trading activities. KFHL as a strategic intention to acquire an additional 24.9% stake in CFX Holdings to protect the initial investment and to ensure management control. That did not work. Instead, Sean Maloney opted to withdraw and take over the failed General Commercial Bank license to form the CFX Merchant Bank. Although British executives thought the coalition failed, as the government canceled the reform bureau, it seemed Sean Maloney refused to give up the kingdom's pursuit of additional equity control. Therefore, once the kingdom can not control KFX, it will fall reasonably. The liquidation of the investment in 2002 resulted in a loss of PLN 403 million.
Pfihwa P / L finances the informal sector as a form of corporate social responsibility. However, when a hyperinflationary environment and a tight regulatory environment were violating the project's viability, it ended in early 2004. The Kingdom provides funding for the informal sector through MicroKing, which was established under international assistance. By 2002, MicroKing had eight branches in or near the microenterprise cluster
In 2000, the Kingdom opened a private banking institution to discount home sales in the banking sector due to increased activity in the foreign exchange sector source. In accordance with market trends, it makes the insurance company AIG in 2003 to enter the bancassurance market.
Meikles Strategic Alliance
In 1999, Chuang Chanakira's proposal from his executive and legendary corporate finance team from Barclays Bank led by affectionate Hugh Van Hoffen with Meikles Africa's Strategy Union, which injected 322 million zlotys to the kingdom, holding 25% stake. Interestingly, the deal almost collapsed because Meikles was only willing to pay $ 250 million, while KFHL valued itself at Z $ 322 million, which is actually the largest private sector transaction between Aboriginal and listed companies. Nigel proved that it was a walk through the incomplete celebration of the church site, before signing the Meikles deal Saturday, causing him to sign the deal he saw, and he sowed a huge seed into the church to promote the construction fund. God is faithful! The kingdom's share price fell to $ 112,00 from $ 12,15 in October of the following year
The Kingdom of Return acquired a strong cash-rich shareholder, allowing it to enter the retail banking business through innovative in-store banking strategies . Meikles Africa opens retail outlets, namely TM Supermarkets, Clicks, Barbours, Medix Drugstores and Greatermans, as distribution channels for Kingdom Commercial Banks or as account holders for deposit and demand banking services. This is a cheaper way to enter the retail banking. It proved useful during the 2003 cash crisis, as Meikles had substantial cash resources in its operations to assist the Bank of the Kingdom, thus mitigating the liquidity crisis. The alliance also enhances the reputation and reputation of the Bank of the Kingdom and provides the Meikles Africa customers with an opportunity for the Kingdom through its jointly owned Meikles financial services. The Kingdom funds all of the leasing and leasing purchases of the Meikles subsidiary, facilitating the sale of Meikles and providing convenient access to the Kingdom. Meikles Managing Relationships with Customers
Meikles Africa, as a strategic shareholder, guarantees the success of the Kingdom, requires a capital reorganization and strengthens the Kingdom's brand image.
The Kingdom debuted retail banking business in January 2001 with stores in High Glen and Chitungwiza TM supermarkets, taking advantage of the strategic relationship with Meikles Africa. The main target is the mass market. This ride builds on the powerful brand kingdom through unit trusts. In-store banks offer low-cost delivery channels with minimal investment in brick and mortar. By the end of 2001, there were 13 branches in the country. It is a deliberate strategy to aggressively launch affiliates, two flagship branches in Bulawayo and another in Harare. There is a strong emphasis on IT-driven strategies that have significant cross-selling between commercial banks and other divisions
However, further discoveries of high-end customers have a market, hence the establishment of CRBC channels diversified Targeted market. In 2004, after closing three branches of the store in rationalization activities, there were 16 in-store branches and nine official banking outlets
Considering the impending time the banking sector may be at the entrance of the upcoming commercial banking changes. Commercial banks do provide cheap deposits, but at the expense of huge staff costs and human resource management complications. Nigel admitted that, in hindsight, this could be delayed or slowed down. However, the need for increased market share in highly competitive industries requires this. Another reason for insisting on commercial banking projects is a previous agreement with Meikles Africa. It is possible that Meikles Africa has already sold the equity takeover deal, promising to engage in in-store banking, which will increase the income of its subsidiaries.
Innovative Products and Services
KFHL continues to actively pursue product innovation. After the KFX project has failed, create a CurrencyKing to continue working. However, this was intervened by government ministers in November 2002, repealing government intervention to ban parallel market foreign exchange transactions.
In October 2002, KFHL established the Kingdom Leasing Company after obtaining financial housing permits, which was misguided, not only in the absence of failed foreign. Its mission is to take advantage of financial leasing, leasing and short-term financial product trading opportunities. Regional expansion
Approximately 2000, it is clear that the domestic market is highly competitive and has limited prospects for future growth. It was decided to diversify the income stream and reduce the risk of the country by penetrating into the regional market. The strategy will leverage proven capabilities in small-scale capital-based securities trading, asset management and business advisory services. As a result, imports have a low risk of capital injection. Considering the restrictions on foreign exchange control and the shortage of foreign exchange in Zimbabwe, it is a prudent strategy, but not without its shortcomings, will venture in Botswana.
In 2001 KFHL acquired 25.1% of the shares of a greenfield banking firm in Malawi, where First Discount House Ltd. was seconded to Malawi in order to protect its investment and ensure management control. , While Nigel Chanakira presided over the board. The investment continues to grow and generate positive returns. As of July 2006, the Kingdom had managed to increase its investment ratio from 25.1 per cent to 40 per cent and could eventually control it to seek to convert licenses into commercial banks.
KFHL also holds 25% of Investrust Merchant Bank in Zambia. Franky Kufa was appointed Executive Director, and Nigel held a seat on the Board of Directors
KFHL was given the option of gaining control. However, when the bank stabilized, the Zambian shareholders carried out some suspicious transactions, is not prepared to let KFHL raise its shares, so KFHL decided to withdraw, because the relationship has become cold. The Central Bank of Zambia intervened in a commitment to grant KFHL its own banking license. This has not materialized because the Central Bank of Zambia used the Zimbabwean banking crisis to reject the KHFL's license.
In Botswana, a subsidiary called Kingdom Bank Africa Limited (KBAL) was established as an offshore bank in the international financial center. KBAL aims to lead and manage the Kingdom's regional initiatives. This was led by Mrs. Irene Chamney, accompanied by Lysibas Sibanda, after the management challenge in Zimbabwe, Nigel's agreement. The other two executives were seconded there. She successfully established KBAL's banking infrastructure and maintained good relations with the Botswana authorities
However, the choice of offshore banking in the country prior to the commercialization of the Botswana Commercial Bank license was granted by Achilles Bank in Zimbabwe The banking crisis occurred between 2003 and 2005 even more so. Mrs. Chamney and Mrs. Chanakira appear to have a fundamental distinction between bank survival and development
Mrs. Chamney considered prudent to leave the bank in 2005. In 2001, KFHL was authorized as the only distributor of American Express cards throughout Africa, except RSA. This is handled by KBAL. Private banks in the Kingdom have moved from discount stores to become KBAL's subsidiaries due to the current regulatory environment in Zimbabwe.
In 2004, due to insufficient funds, KBAL temporarily under the curator. At this stage, the parent company has regulatory restrictions that prevent foreign capital injection.
found a solution for local partner purchases and a $ 1 million transfer from Botswana to former Cleantech proceeds from investment trusts. Nigel Chanakira played a more active management role in KBAL because it was of great strategic importance to the future of KFHL. Efforts are underway to purchase a local commercial banking license in Botswana. Once obtained, there are two possible scenarios, namely the maintenance of two permits or renunciation of offshore licenses
Respondents disagree. However, it seems to me that KFHL is likely to give up offshore banking licenses and use local Botswana Bank (Pula Bank) licenses for regional and domestic expansion in the interests of stakeholders
Staff complementation increased from the initial 23 in 1995 to more than 947 in 2003. Growth is aligned with growth. It exploded, especially during the launch and expansion of commercial banks. From the outset, the Kingdom had a strong human resources strategy that required extensive training both internally and externally. Before the foreign currency crisis, employees were sent to RSA, Sweden, India and the United States and other countries for training. In the faith of Ntabeni Bhebhe, the kingdom has a vibrant human resource driver that has created a powerful human resource system for emerging monsters
As a sign of its commitment to building human resource capabilities, financial services entered a The management agreement with Dutch AMSCO provides experienced bankers. Through this strategic alliance, the Kingdom has stepped up its skills base and increased the opportunity to impart skills to the locals. This helps start-up bankers to create a solid management system for banks, while experienced bankers from the Netherlands compensate young emerging bankers. What a vision!
Internally self-directed interactive learning, team building exercises and mentoring are all part of the learning menu designed to develop the Group's human resources capabilities. Introduces work and job analysis to best match employees to the right jobs. Career paths and succession planning are accepted. The Kingdom is the first to have a stable, not strengthen the transformation of the CEO of the venture bank. Founder CEO in 1999 through the baton to Lysias Sibanda, served as Group CEO and Vice Chairman of the Board. His role is the pursuit and leadership of global and regional niche financial markets.Franky Kufa, as Group Chief Executive, replacing Sibanda, Sibanda resigned for medical reasons. One can say that these smooth transitions are due to the baton being passed to the founding directors
Cultural problems arise as a result of the explosive expansion of commercial bank project personnel. Therefore, KFHL participated in a cultural revolution of the cultural revolution, known as the "kingdom of the team." This culture has to be diluted through significant mergers and acquisitions, with significant increases in employee turnover due to increased competition, and the increased age of migrants to greener pastures and staff increases the risk of high liquidity and fraudulent collusion with the public .
In 2004, due to a staff turnover rate of 14%, a compensation strategy was implemented to operate on key IT and financial skills. Due to lower profit margins and economic pressures in 2004, KFHL lost 341 staff due to layoffs, natural attrition and migration. This is acceptable because profitability is declining while staff costs soar. At this stage, staff costs account for 58% of all costs.Despite the impressive growth, inflation-adjusted financial performance was flat. In fact, a loss position was reported in 2004.
This article shows entrepreneurial determination to drive the realization of dreams, despite the significant odds. In the next article, we will address the investment challenges faced by Nigel Chanakira