The Star (Nairobi)

Kenya: Equity Braces for Mobile Money War Starting May

LARGEST lender by deposit accounts, Equity Bank, hinted yesterday it could be closing in on a partnership deal with a mobile phone manufacturer as it prepares to venture into telecoms business mid next month.

CEO James Mwangi said the bank, through its subsidiary Finserve Africa, was in final stages of the big launch expected to tilt the stakes in the growing Sh2 trillion mobile money industry.

Mwangi was however guarded on the specific services to be offered through the Mobile Virtual Network Operator licence it received from the Communications Authority of Kenya last Friday.

"You come mid next month. We will hopefully be giving you a new SIM card and a branded phone," he said but was not keen to divulge much before the planned launch.

He however said the lender that accounts for over 55 per cent (8.7 million)of deposit accounts has settled on preferred services that were apparently undergoing regulatory checks for quality certification.

He added: "Once you get a licence and you pay for it and then you are given a number, you can't do a lot until...it's a sequence," he said. "We are on track...(and) within that month(May), we will have done everything and we will respond to everything."

Equity's chief for finance, innovation and technology John Staley was equally cautious only saying that convergence of financial services and ICT through a mobile phone was the future of banking industry.

Equity's Finserve, Zioncell Kenya-mobile phone value added services firm - and Tangaza mobile money transfer services owner Mobile Pay were the first three successful MVNO applicants. They will all use Airtel's infrastructure.

Equity's quest for a slice of mobile money service almost became a reality with the now sour partnership dominant Safaricom in 2010 to launch M-kesho. The innovation was later killed after the two companies disagreed on sharing proceeds.

Safaricom would later in November 2012 partner with largest privately owned lender Commercial Bank of Africa to launch Mshwari. Mshwari had by last February posted close to Sh8 billion loans and over Sh24 billion in deposits.

Mobile Pay's Tangaza also unsuccessfully tried to ride on Safaricom's infrastructure to provide mobile money services two year before the globally successful ground breaking M-Pesa was launched in March 2007.

Airtel's outgoing managing director Shivan Bhargava on Monday backed MVNOs to "stimulate and sustain overall market growth through a new range of innovative products and service propositions that will give more choice and value to Kenyans".

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