Equity’s road to 100 million members

 Equity’s road to 100 million members

To grow her presence across the East African Community market, Equity Group CEO Dr James Mwangi is rolling out a model which the Pan-African lender created nearly two decades ago when it converted into a fully-fledged commercial lender from a building society.

For an African who has built a banking business in Kenya, Rwanda, Uganda, DRC, Tanzania, South Sudan, and a Commercial Representative Office in Ethiopia, nationality gets blurred quite often.

Equity Bank CEO Dr James Mwangi is a demonstration that East African nationals can build any business creating value and wealth across the region beyond the limits of physical borders.

Equity Bank is one of East Africa’s most formidable business success stories that is challenging the traditional dominance of North, South and or West Africa-owned enterprises in Pan-Africa finance.

And he is not just an example on a pedestal, he is putting a substantial amount in this cause with a commitment to finance businesses that dare reimagine East Africa’s enterprise to the tune of Kes684 billion or US$6 billion.

To achieve this, Equity Bank is undertaking a phenomenal challenge, building a remarkable reality where you can substitute national identity such as Kenyan, and or Ugandan with being just a member.

Equity Bank is not just experimenting; the bank is applying a model it created nearly two decades ago when it converted into a fully-fledged commercial lender from a building society.

In Kenya, Dr Mwangi was proven a visionary when he turned to the neglected retail segment, creating specialist small loans targeting roughly 600,000 customers and sustaining steady growth into a full-scale commercial bank with 17 million customers spread across East Africa.

Read also: New frontiers: 26 Kenyan firms ready to invest Sh109 billion in DRC

To achieve this, the bank converted customers into members and members into owners on listing at the Nairobi Securities Exchange in 2006. Soon after, the lender embarked on growing the brand beyond Kenyan borders into what it is today, a Kes1.3 trillion financial institution and the largest locally owned lender in the region.

“Equity started with just 3,000 customers but grew that number to almost 17 million. I want to express our gratitude for walking with us for over 30 years. From an asset base of Kes20 billion, you have helped us to build up assets of over Kes1.3 trillion,” Dr Mwangi said.

In Africa, most borrowers rely on relatives and social networks to raise money for the purchase of household items and or capital to start small businesses.

A significant number of people keep their money at home, under mattresses, leaving a huge section of the economy unbanked.

Equity Bank saw this as an opportunity in Kenya where they invited these small savers and aggregated the numbers to mobilize billions in deposits.

To offer better services to these retail and largely unrated customers, Equity needed to know them, creating the ‘mimi ni member’ moniker, driving customer obsession that offered an understanding of who they were lending to while subscribing to Dr Mwangi’s philosophy of building a community of shared prosperity.

By lifting millions out of poverty through financing their businesses, Equity Bank grew its brand exponentially primarily on recommendations by word of mouth in turn winning the hearts and minds of millions of members from Kenyans joining colleges to farmers, to mama mbogas, boda bodas and big corporates.

As the customer numbers grew, so did the bank expand, offering loans and creating beneficial partnerships between clients and the lender.

Dr Mwangi has now set his sights over the horizon and is seeing potential that East Africa presents through a similar model with special emphasis on small business at a time the lender has the muscle to cover large corporates, mining operations, agribusiness and the rising hospitality business.  

Dr Mwangi is not the only one who has seen this potential. Back in 2013, ex-Barclays CEO Bod Diamond sought to become a leading player in sub-Saharan Africa through Atlas Mara before a string of bad moves held it back.

He envisions growing the Pan-African lender just as he has steered Equity Bank in Kenya: from members upwards.

Equity Bank acquired Belgian tycoon George Forrest’s 66.53 per cent stake in Banque Commerciale du Congo (BCDC) for Kes10.4 billion ($95m) and merged it with Equity Bank Congo forming Equity BCDC in a bold move to attract small businesses, mining companies and retail customers in the country with a population of over 90 million people.

Equity Bank has been in DRC since 2015 when it bought 86 percent shareholding of ProCredit Bank and renamed it Equity Bank Congo in 2017.

With a huge presence in the entire East African Community market, Dr Mwangi has now embarked on executing his growth strategy towards a million Equity members.

To accelerate the growth, the bank designed a Marshal Plan for the region, pledging to loan out Kes684 billion to businesses in her Africa Recovery and Resilience scheme in bid to help businesses recover from the woes of Covid-19 pandemic.

Make no mistake because this is not philanthropy, it is a business and Dr Mwangi is making very calculated risks.

Equity Group Chairman Professor Isaac Macharia (left), CEO Dr James Mwangi (centre) and DRC President Félix Tshisekedi. Equity Bank has been in DRC – a market of over 90 million people – since 2015 when it bought 86 percent shareholding of ProCredit Bank and renamed it Equity Bank Congo in 2017.

Equity Group Holdings Plc signed a $100 million (Kes11 billion) loan with Team Europe, Germany’s DEG, the Netherlands FMO and the UK’s CDC Group in its continued commitment to strategically walk with MSMEs during the three years in the depth of Covid-19 pandemic.

The bank also sought to support the business it lends to by facilitating trade exchanges across borders with the help of governments and organized business lobbies.

For instance, the bank organized a delegation of 300 business leaders from Kenya to tour the Democratic Republic of Congo (DRC) and help draw linkages between investors from the two countries.

Already, a total of 26 Kenyan firms have committed trade investments worth $1.6 billion in the DRC. The 26 traders are part of the Kenya delegation that participated in last year’s Kenya-DRC Trade Mission organized by the Government of Kenya and the Government of the Democratic Republic of Congo (DRC) in partnership with Equity Group.

For Dr Mwangi, a Kenyan business magnate who has built a business across the region, the belief that the customer, the member is the building block for this ambitious journey may just pay off with success where foreign banks with bigger financial war chests have stumbled. 



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