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Banking on skills

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Banking on skills

High youth unemployment across Africa is frustratingly coupled with a lack of skills needed for growth in many sectors, including housing and construction. One bank had the vision to see the links between their mortgage lending business and the need for increased skilled employment.

When Equity Bank, the Kenya- headquartered East African banking group, took a stake in the Housing Finance Company of Kenya (HFCK) in 2007, it discovered that skills shortages in the construction sector hindered its route to profit. HFCK needed good quality offices and housing developments completed faster so it could lend more profitably to buyers.

James Mwangi, the chief executive of Equity Bank, seconded Winnie Imanyara, then Equity’s Director of Change and Leadership, to take on the role of Director, Change and Strategy at HFCK. From there she established the Housing Finance Foundation, which she now heads as Executive Director. Equity has since sold its stake in HFCK to British-American Investments Company, a Nairobi-listed financial services group.

The Housing Finance Foundation, which partnered with Kenya’s Ministry of Higher Education, Skills and Technology and receives support from the African Development Bank, USAID, Germany’s GIZ development agency and the Rockefeller Foundation, seeks to train one million Kenyans in the skills the construction industry urgently needs.

New African spoke to Imanyara about the innovative and ambitious programme on the sidelines of the 2015 Global Education and Skills Forum, held in Dubai, where she was talking about HFCK’s work. 

The forum drew together world leaders in the education field to discuss new technologies, policy changes and public-private partnerships. It was also the setting for the awarding of the inaugural Global Teachers Prize. Sunny Varkey, whose Dubai-based but ultimately Cayman Islands-owned education company GEMS is one of the largest operators of private kindergarten-to-grade-school education, with over 90,000 students across the Middle East, Africa, Europe, Asia and North America and 2013/14 profits of $75million, set up the prize as the “Nobel of education”. Each year, one “super-special” teacher wins a prize of $1 million. American Nancie Atwell, who founded the Center for Teaching and Learning, won the inaugural prize. Kenyan primary school teacher Jacque Kahura received $25,000 as one of the finalists. A number of high-level guests attended the ceremony, including Dubai’s Prime Minister Mohammed bin Rashid Al Maktoum, Rwanda’s President Paul Kagame, former Nigerian President Olusegun Obasanjo, former US President Bill Clinton, and former UK Prime Minister Tony Blair.

Training for growth

After her secondment to HFCK, Imanyara “quickly realised that the bank was not growing, and as this was an investment, we needed to improve the institution’s financial efficiency to provide a return. We had to come up with a strategy for change.”

The search for a strategy coincided with Equity’s shift towards extending financial services to a larger section of the population. At the time, most commercial banks were focusing their activities on a very narrow set of wealthy and professional customers.

“One of the main pillars of Equity Bank’s 2012-16 strategy was that we must connect with the communities with whom we work,” Imanyara says. “But because the social investment of the Housing Finance was not robust, we were having difficulties being accepted by the communities where we operated, or where we wanted to open new branches.”

What Imanyara and her colleagues concluded was there was an obvious need to create a foundation to connect the bank emotionally with these communities. But just how the bank could connect was the question.

“We came up with the idea of training artisans for two reasons,” Imanyara recalls. “Firstly, the majority of Kenyan youths were unemployed and unskilled, and those that were skilled, were skilled for a jobs market that was already saturated. The ones who were not skilled were the people we could use for building and construction. The second reason was that the bank finances construction and building, and that if we trained these young people, and they got into this employment space, then that would mean that construction would be faster and probably of higher quality. That would lead to us making more loans as well as creating employment.”

The foundation is now one year old and has trained over 8,000 artisans in seven key areas: electrical skills, carpentry, painting, welding, masonry, plumbing, and fabrication. There is still a long way to go to meet that million target, but a start has been made and, as Imanyara says, “the ‘million’ figure is really a turn of phrase. Let’s say we want to train as many artisans as possible”.

It is a “personal conviction” for Imanyara, Kenya’s torchbearer for the third Millennium Development Goal, which covers gender equity and woman’s empowerment, “to ensure that there are more women coming into this space. We’re trying to break down the gender gap.” And right now, there is a considerable gender gap, as Imanyara explains: “Of those we have been able to train, three out of four of them are men and a quarter of them are women, so we are meeting the need to increase the employment of women. And we have also focused on training people without families, orphans and the like, and those with disabilities.”

These days, Imanyara likens Kenya to a massive construction site. “Right now,” she says, “it looks like New York! Construction is a major employment sector and we must encourage inclusiveness, to ensure that women are motivated to join the building and construction sector, especially the artisan trades.

“One of the biggest employers in our country is construction. What we do is ensure trades like painting, and electrical engineering, are open to women to be trained in and be employed in.”

Encouragingly, the trained artisans, whose skills are in high demand, are starting to be taken on as permanent employees, not in the day labourer positions that dominate the industry. A typical training scheme would be on site, with trainees working up to mid-afternoon and then taking on the training until early evening, where what they learn can be applied over subsequent working days.

The Housing Finance Foundation’s initiative may be a drop in the ocean in dealing with Africa’s unemployed youth and housing shortages, but it is a model that could be learned from, adapted and expanded to greater effect.

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Written by Stephen Williams

Stephen Williams is a freelance journalist, based in London UK. Having worked in publishing for over 40years, he has focused on covering issues that directly affect the majority world. A specialist on Africa, his remit also includes the Middle East and North Africa region. Currently, Williams works for a number of London-based print publications including New African magazine.

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