19/02/2015
Translated by Natascha Tenner

This was no different in Kenya where access to financial resources for majority of the rural population was seen as a luxury only left to the elite. I remember the story my mother always told me of my grandfather who was very wealthy from his meat and livestock business but he could not access any financial institution because he could not read and write English. It was an unfortunate case and my grandfather was left to store his money in the house in a little drawer.

But gradually things are changing and financial institutions are realizing the vast potential that lies in the growing population and the impact they can have on the financial growth of not only the banking institution, but also the growth of a community and nation in general. Most banks that before were only after the wealthy elite are now clamoring with all sorts of marketing strategies at every corner of the street to try and capture the low income population. In my hometown where the older generation are still unable to read and write in English I see most banks having both a Swahili translation of banking materials to enable those that don’t understand English and for those that are only conversant with their mother tongue, the bank marketers go out of their way to help, asking them to come with their family members who they trust to help them with the process of banking.

But before this entire hullabaloo began, one man with vision and who empathized with the rural population decided to dive in and help. Peter Munga in 1984 set up a small building society aimed at offering mortgage finance for the low income earners. The target market were people living in the rural areas mostly illiterate, earning average to low income and living in areas where there were next to no banking facilities.

With Equity building society, people in the rural areas were able to access small loans to build their homes thereby improving their lives.

HISTORY OF EQUITY BANK

However by 1993 the building society had been declared bankrupt and was making losses to the sum of 33 million Kenyan shillings. The founder instead of calling it quits decided to re-strategize and transformed the bank to a micro finance and decided to enlist the help of a young Bachelor of Commerce graduate and certified public accountant from the university of Nairobi, Mr. James Mwangi.

Mwangi’s background is typical for most Kenyans, he was born and grew up in the rural areas of Kangema in Kenya where getting a pair of shoes was the best thing that could happen to you. He had no big ambitions in life but he was bright in class and passed his high school and got called to enroll to the University of Nairobi for Bachelors in Commerce. After graduating from University he got a job in Kenya’s National Social Security Fund where he stayed on until the calling to be part of Equity Kenya.

When Mwangi joined Equity micro finance, he was positioned as the strategy and finance director. Equity bank had only 27 employees, 27,000 customers and only had 5 branches. It was ranked as the worst financial institution in Kenya. Mwangi had a huge task ahead of him.

 

James Mwangi
James Mwangi ist der geistige Vater der Equity Bank.

He dedicated all he had into the task. He spent long hours and late nights trying to shift the circumstances at  Equity.  His biggest challenge was to get more clients signing up and so he came up with a strategy geared on customer services, where he considered the customers to be equity’s biggest asset. His customer target was the peasants and farmers in the rural areas. He ensured that they got the best treatment when they came to request or enquire about equity’s services and that the services were both affordable and accessible to the people that needed it.

In no time word got around of the great services offered in Equity and people who couldn’t previously access financial resources were lining up at equity’s door wanting to get financial help. Mwangi ensured that good customer service was adhered to and this won the hearts of the people who felt previously neglected.

In 2004 having toiled day and night and finally having resurrected equity, they management decided it was time to move a step up and Equity transformed from a microfinance to a bank with a vision to be the champion of the socio-economic prosperity of the people of Africa. There was huge support from the local Mwananchi (citizen) and a lot of sign ups.

Equity has always found ways to make banking more convenient, accessible for the population and 10 years after its transformation into Equity bank, the bank is now among the leading banks in Africa in terms of customer base, technology and innovation, and inclusivity in the financial sector. The bank has won numerous awards for its services and the recognition continuous to grow. In the first half of the year 2014 Equity bank recorded a profit growth of 21% putting its profits 7.6 billion Kenyan shillings after tax.

ACHIEVEMENTS OF EQUITY BANK UNDER JAMES MWANGI

Equity bank currently has a customer base of 9.1 million people making it the largest customer base in Africa. The bank has spread its branches across East Africa in Rwanda, Uganda, Tanzania and South Sudan with a focus of leaving a Pan-African footprint. The bank is not only the most preferred banking service in Kenya according to International Certification Associations but it also has the lowest charges in East Africa and is the largest micro financer in East and Central Africa.

But probably the biggest achievement of Equity Bank to the Kenyan society thus far has been its corporate social responsibility program ‘Wings to Fly’ which offers free education to under privileged students who finish their primary and high school level but are unable to continue with their education because of luck of funds. This program has seen about 8,000 Kenyan youths going through the program able to enroll into the best schools and universities in Kenya and abroad, with the best performers later getting apprenticeship and job opportunities with Equity bank.

 

Equity Centre
Das Equity Centre in Nairobi.

The bank is now focusing on the telecommunication sector and is planning to offer subsidized mobile services under Mobile Virtual Network Operations which will see Kenyans able to use Equity’s sim card together with that of other mobile operators and are able to switch up sim cards to get better offers. Mwangi indicated the aim was to liberate Kenyans from a monopolistic hold, give them freedom of choice and control of their lifestyle while changing their banking experience fundamentally.

A KENYAN BUSINESS LEADER AND TENACIOUS REFORMER

James Mwangi‘s strategies to transform Equity are now being used as models of study in leading business schools in the world. His great works have been immensely acknowledged not only in Kenya where he remains a prolific figure and inspiration to many but also across the continent and the globe. Some of the most notable amongst his numerous awards include; African business leader of the year 2013, Forbes African person of the year 2012, Ernest & Young Entrepreneur of the year 2012 and Chief of the order of the Burning Spear, 2011 for his economic contributions to Kenya – This is the highest order of private citizens in Kenya. Mwangi is currently the chairman of the Kenya’s Vision 2030 Delivery Board which is charged with the responsibility of ensuring Kenya becomes a middle income country with global high standards of living by the year 2030.