Equity Bank

A few years ago, Equity Bank was a relatively unknown bank in Nairobi. Started in 1984 as Equity Building Society, the company wanted to provide micro financing solutions to a majority of Kenyans who lacked access to financial services or could not afford them. The society grew to become a leader in micro financing and the growth of business volume and outreach led to the conversion to a commercial bank in December 31, 2004. The corporation was registered as Equity Bank Limited (EBL).

I sat down with James Mwangi, the soft spoken, passionate and highly intelligent CEO to talk about the company, its history and direction for the future. Below is an excerpt of the interview.

African Path: The Company was virtually unknown on the national stage but now has great market share. What has contributed to the meteoric rise of the company?

James Mwangi: Equity Bank is relevant to Kenyans. It is a symbol of people’s determination to improve their lives and overcome poverty. This has enabled us to address their needs and deliver service within their social constraints. We currently have 33% of all bank accounts in Kenya (1.15 million out of 3 million accounts). We also service 268,000 loans which are over 40% of all loans offered by banks in Kenya.

Equity Bank is a place where people belong. We have made banking accessible and affordable for everyone. An example would be when bankers would charge KShs. 800.00 for checks, Equity Bank charges KShs. 150.00.

African Path: What do you attribute as the biggest reason Equity Bank has been able to grow?

James Mwangi: Equity Bank’s policy is to have a human face. We bring dignity to banking. Everyone in Kenya should have access to financial services. People see how we treat them without prejudice, how we understand who they are and their attempt to improve their lives. We understand Kenyans, we recognize them and we appreciate them.

African Path: What does it take for one to sign up?

James Mwangi: One has to desire to use our service. More than that, a national identity card or passport is sufficient enough to open an account. Telephone, water and other forms of bills are irrelevant since only 10% of Kenyans are connected to the national grid. To work with all Kenyans, you need to include those in rural areas.

African Path: With the opening of the economy and growth in investments, will Equity Bank work more with common mwananchi?

James Mwangi: Our bank’s vision and mission is to serve Kenyans. We are designed to support the mwananchi. The upper end of the spectrum has 43 banks serving 6% of the Kenyan banking customer base. We are the only bank serving the remaining 94%. We currently have 53 branches spread out in the country. Rift Valley is the largest with 12, Nyanza and Western with 8 each. We have a national outlook and want to continually extend our network.

African Path: Do you have programs that teach money management and provide easy access to money for your customers?

James Mwangi: 67% percent of our customer base didn’t’ have any money management skills when they first walked through our doors. We have published two books that educate customers on money management: “How to start a business” and “How to grow a business”. We also have a department, Business Support Department, to interact with businesses providing models on how to work with financial services and assist in building financial discipline.

African Path: What are the growth goals for the corporation?

James Mwangi: We have had a 100% growth rate over the past 10 years. We anticipate a continuing trend for the next 5 years sustained by regional operations. We want to become a facilitator of trade in East Africa. With cross border trade in countries such as Uganda, Tanzania, Burundi and Southern Sudan; our model should be able to work in these markets. Our model is based on low margins and high volume to ensure growth and profitability.

Equity Bank might be the most important vehicle for economic growth in Kenya. For example, there is a joke in Nairobi that people should get rid of Equity Bank since it promotes pollution. Equity has empowered 26,000 Kenyans to purchase cars. This enables growth within the economy.

African Path: What are the future plans for Equity Bank?

James Mwangi: We want to make banking easily accessible and affordable for Kenyans. We have invested $15 million in the most sophisticated IT infrastructure in sub-Saharan Africa. This software has the capacity for 35 million customer accounts We have the biggest network of ATMs in Kenya with 200 while the next bank has 103.

African Path: What programs are available or are you planning to make available for Kenyans in the Diaspora?

James Mwangi: Kenyans in the Diaspora are our partners. We want to establish partnerships with these people. We want to develop money remittance programs. Currently, we are working on two pilot programs. The first one is Equity Moneyline in the UK and the second is a relationship with Commerce Bank in Germany.

We want to dominate the remittance sector by minimizing the inefficiencies in pricing and convenience. With a nationalistic perspective of bringing money back to Kenya for development, we should be able to grow in this industry. The key is finding ways to reduce the cost of money transfers and overdependence by Kenyans back home on remittances. To do this, we will offer loans and programs that enable families to start entrepreneurial ventures and we can have those in the Diaspora make monthly payments to repay these loans. This program will grow the economy and give families a sense of pride and dignity in their endeavors.

African Path: What policies do you have in place that can improve recruitment of employees?

James Mwangi: Equity Bank is currently the preferred employer in Kenya. We have created an enabling environment that ensures our employees reach their full potential. We want to contribute to the growth of the country. This spurs our team to work hard and promotes nation building. We also have a 15% ownership stake for Equity’s staff.

Due to the great work our employees do, we are the first building society to convert into a bank. We also work hard to ensure we have the right employees who will execute the company’s vision. We also borrow from the Diaspora by recruiting Kenyans. We view working with Equity Bank to be a calling to change lives instead of a job.

African Path: Any additional comments?

James Mwangi: I would like to appeal to Kenyans in the Diaspora with knowledge and the necessary skills to put it to use at Equity Bank so that we can grow and contribute to Kenya’s development. After all east of west, home is best. Thank you.

One of the delegates from Minneapolis, Douglas Wanyoike of Accents Communications stated that he learnt a lot from Equity Bank this past weekend. From the long lines of delegates opening bank accounts to the ease of access to top management during the conference, the bank displayed a clear understanding of how to be the people’s bank. These were Mr. Kimani’s comments:

“Equity Bank has taught me that everyone is valuable in the country. A dollar is a dollar regardless of where it comes from. Invest in your customers by teaching them how to best maximize the value of your product and you will grow the customer base. Do not become the big, unapproachable company, but rather serve the people. These are the paths to success.”

I couldn’t have said it any better. The company has been executing its business plan to perfection. Investing in the right employees, building an IT backbone to support growth, making banking services more affordable and accessible and investing in its customers. It is no wonder, that Equity Bank is the bank of the people (via africapath).