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Case Study - EquityA Bank Very Actively Developing Branchless Banking!

Philippe Breul, Neu-Anspach, 20 November 2013

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KENYA is rapidly catching up

Total Area: 582,650 sq Km

Population: 34,707,817

Urban Population: 60%

Literacy: 89%

As of the 2009 FinAccess stand!

Order of magnitude for 2012:

Informal: 75%

Formal (Mpesa, …): 50%

Banked: 25%

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-19

13 23 23 47 66195

227 324478

1.271

1.594

2.201

3.110

Mil

lio

ns

7 9 12 11 18 2535

55111

142

218

501

1.103

1.362

Mil

lio

ns

35 97 122 195 230 327 450 8601.189

1.734

3.099

5.885

11.428

16.551

Mil

lio

ns

Facts and Figures: Equity Bank aggressively addressed the BoP

Growth in Loan Portfolio

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Growth in Profit

Total Assets

-19

13 23 23 47 66195

227 324478

1.271

1.594

2.201

3.110

Mil

lio

ns

Share Holders Funds

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10 years of branchless banking learning

4

Van

Electronic Telco Partnerships

Agent Banking

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An impressive development in the last 2 years

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Nearly 7,000 Agents in 2 years

A new source of 50m€ low cost deposit

A key driver of growth – 2m transactions

A boost for client activity & loyalty (2m mobile )

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EAZZY 24/7 SERVICES

•Utility bills payment•Loan Repayment Notifications•Loan Approval Notifications•Funds Transfer•Person to person payments•Person to business payments•Business to person payments•Stop card instructions

Reply with the transaction you wish to perform

1 Banking2 Top up3 Bill Payments4 Pay an Eazzy 24/7 Agent5 PIN Change6 Stop a Card7 Request a Card

USSD & IVR

Reach the un-banked

Pay at a Supermarket

Micro-Credit Services Under Consideration on all ABC 6

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Value Chain Approach

Farmers and farmer groups

Input suppliers: Agro-dealers – Wholesalers & retailers

Agro-processors

Input Manufacturer / Importers: Seeds, Chemicals,

fertilizers

Extension: Private sector

Development partners: Donors, NGOs, Research institutions, Govt. extension

Buyers: Exporters, Institutions etc

1

2

45

6

7

811 12

13

3

9

10

7

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Equity bank is also addressing the missing middle SMEs

Increasing focus on SMEs (% Loan)Following client developments (% Loan)

2009 2013

While limiting risks

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BoP Branchless Banking can be very successful Equity Bank September 2012 investors presentation

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Massive Financial Inclusion in Kenya

CBK shows that deposit accounts rose by 2.15 million in the 3 months to September to stand at 21.1 million.

The jump has been attributed to the introduction of M-Shwari, a mobile-phone based bank account launched last year. Its uptake has seen CBA’s deposit accounts as at September surpass five million up from 34,884 in 2011, to leave it second only to Equity Bank which hosts over seven million accounts.

Profitability continued to reach new heights after it posted Sh92.5 billion for the nine months to September compared to Sh80.8 billion last September.

Customer savings however grew at a slower pace of 2.7 per cent to Sh1.91 trillion, indicating the new accounts are of small savers, consistent with mobile money users..

KCB aims to open three million accounts in the next 12 months with its recently launched M-benki services, to see Safaricom’s subscribers open bank accounts from their handsets

Source: Financial Access Oct. 2013

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