CIO East Africa (Nairobi)

26 May 2014

Kenya: Equity Group Set to Ignite War On the Mobile Money Front

Photo: Lilian Mutegi/CIO
Equity Bank CEO Dr James Mwangi (2nd right) is joined by, from left Adil El Youssefi, CEO Airtel Africa; Eng. John Waweru, Chairman Finserve Africa Ltd and John Staley, Chief Officer, Finance, Innovation and Technology during the unveiling ceremony at Equity Centre.

Equity group has said it is determined to kick out telco brokers who have been inter-mediating between financial institutions and users once it rolls out its mobile virtual network operator Finserve in July.

Already the financial services giant has announced reduced transfer fees of 1 percent or not more than Kshs 25 and loan interest rates of between 1 and 2 percent, a move that is expected to throw other mobile money providers into a spin.

Equity's rates are attractive as they are far below the 7.5 percent interest rates by rival service M-Shwari- a partnership between Safaricom and Commercial Bank of Africa (CBA) - while mobile money transaction fees can go as high as Kshs 110 depending on the amounts being sent. James Mwangi, CEO, Equity Group said the bank aims at ending the monopoly being seen in the market by offering Kenyans more freedom.

Mwangi says the company wants to transform Kenya into the "cashlite" society if not "cashless" where most of the transactions will be carried out electronically.

"We are not competing with telecom companies as we believe there is a lot for us to share with everyone. Our focus is the 96 percent of transactions that continue on cash basis," said Mwangi.

Equity says that MVNO is part of its Equity 3.0 strategy that focuses on strategic positioning to disrupt a share of the $4 billion growth in East Africa by making financial services and all its products available everywhere and at every time.

Equity adds that the new strategy will allow convergence of financial products and services as well as scale brand visibility and loyalty.

Already Mwangi says that all the 9 million customers of Equity bank will have their SIM cards ready by the date of the launch that they can use to enjoy the bank's products.

For those customers who choose to stay in rival networks Equity says they can continue to do so by placing a thin film on top of their SIM cards. They will however lose several benefits such as the elimination of double transaction charges.

Mwangi has also said that the partnership with Airtel Kenya will stand out as an ideal model for regulators all over the world to learn from.

"SIM cards are going to form the nerve center of our security strategy and we will ensure that every data from our system is encrypted eliminating the risk of losing data over the platform," Mwangi explained.

Airtel on its part says the partnership will serve to increase its revenue stream and ensure better utilization of its infrastructure.

"This is a win-win situation for both companies. We will be creating a new revenue stream hence more profits and we have Equity bank as our biggest customer now," Says Adil el Youssefi even as both organizations denied the possibility of conflict from the competition that will arise.

Equity bank is also hoping to leverage from its interaction with aid agencies that continue to use the institution to provide aid with this partnership expected to provide a market for 1.2 million SIM cards.

The launch of Finserve ie expected in July after ongoing piloting has been concluded with Enrico Nora the current director for mobile operations at Equity spearheading operations while former director general at the communications commission of Kenya John Waweru is the first Chairman.

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