Kenya: Equity Bank to Offer New Affordable Mobile Banking Services
By Staff Writer
Equity Bank Group, Kenya’s largest financial institution by customer base, will launch its Mobile Virtual Network Operator (MVNO) services through its subsidiary Finserve Africa in July.
The bank on Monday May 26 said that it would issue its 8.7 million customers with SIM cards in a move that is largely viewed as eyeing a piece of the fast-growing cell phone-based financial services including Safaricom’s M-Pesa, which will give them access to mobile banking and other telecommunication services.
Mobile money transfer fees will be charged at one per cent the value of a transaction and capped at Sh25.
“If you send Sh100, you will pay Sh1. If you send Sh1, 000, you will pay a maximum of Sh25,” said Equity Bank Group chief executive James Mwangi.
Instant loans will also be extended to customers at a maximum rate of two per cent a month, he said
Equity at the same time has tapped the former Communications Commission of Kenya (CCK) Director General, John Waweru to head the Equity MVNO as its executive chairman
Waweru’s appointment appears to indicate the bank’s readiness to battle it out with the other telcos already established in the market, as he is an industry insider with much knowledge specifically on the mobile money transfer segment of the industry.
He was at the helm of telecoms industry regulator when Safaricom was piloting M-Pesa in Kenya and after the service officially launched it to the market.
The bank said it plans to initially convert its nine million customers before marketing the product to new customers, by issuing them with new SIM cards for the MVNO that can operate alongside conventional SIMs.
Safaricom could get extra spectrum in State deal, Mwangi said as the launch of the bank’s MVNO would see the institution commence its next stage of growth to 2014, which is dubbed Equity 3.0.
He said the institution has its eyes on controlling retail payments, with plans to increase use of cashless payments in the African market where cash payments account for over 98 per cent of all payments.
“We are not competing with Telco’s, the space is too big,” he said during an investor briefing on the progress of the roll out of the MVNO in Nairobi, May 26.
Equity Bank Group received a green light earlier this year, after the Communications Commission of Kenya (CCK) granted them a license to launch Mobile Virtual Network Operator (MVNO) services in the country.
Under this licensing framework, the company will not roll out its own telecommunications infrastructure; instead it will ride on that of an existing operator, Airtel.
Mwangi said that Airtel had opened up 60 per cent of its excess capacity to the new telecom arm.
Equity Bank is driving a cashless payments strategy as it anticipates growth in the African market with the imminent migration of the transport and public sectors to electronic payments.
The bank plans to roll out similar projects in other 18 African countries so as to reach it low end clientele, in process increasing its customer base in the continent.
As the continent embraces e-commerce and mobile banking, local multi-national companies are scrambling for a share of the ever growing market, thus need to offer more better and affordable services that provide solutions to customers problems.