In 2015, Equity Bank’s Finserve Africa limited launched a Mobile Virtual Network Operator called Equitel. An MVNO refers to a mobile carrier that leases infrastructure from existing telcos and launches its operations riding on the telcos network. In the case of Finserve, Airtel Kenya was chosen for Equitel. Equity Bank planned to use Equitel as a tool to foster convergence between mobile money and banking. To this effect, the bank issues its customers with SIM cards taking advantage of Kenya’s large mobile penetration which allowed the bank to scale its service faster.
According to the latest report by the Communications Authority of Kenya, Equitel has managed to amass a market share of 4.4% with 1.6 Million subscribers. During the release of the Bank’s Q1 2016 results the bank attributed Equitel to the growth of its loan books to Kshs. 272 Billion. The Bank issued a total of 3.4 Million loans to customer with 2.8 Million of these loans or 81% of total loans via Equitel. Equitel further saw a 315% quarter on quarter rise in transaction volumes to 45.6 Million from 11 Million in Q1 2015. The value of these transaction rose 562% to 62 Billion from 9.4 Billion in Q1 2015. The average loans issued via the platform stood at 42,000 up from 7,000 with the average repayment period at 4 Months.
In an interview with Marcopolis, Equity Bank CEO James Mwangi said the bank was looking to expand the service within the region. The bank has partnered with mobile network operators in 6 countries where the bank has operations to allow for the launch of these services. This will see the bank launch the service in Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo.
“Mobile devices have become our delivery terminal of choice. Essentially what we have done is to replicate the success of Kenya in the 5 other countries that we operate in. We have formed partnerships with mobile network operators so that we can leverage on their infrastructure without having to incur the cost of infrastructure” – James Mwangi