Equity processing 74 pc of loans via Equitel mobile platform
What you need to know:
The bank said 1.2 million loans worth Sh5.4 billion have been processed through Equitel in the 10 months to October compared to 438,000 loans — of higher individual values though— issued through credit officers in branches.
Equitel has 1.3 million subscribers of whom 88 per cent are said to have activated mobile banking services. The cumulative number of transactions conducted through Equitel stood at 113.2 million as at the end of last week, valued at Sh77.6 billion.
Equitel is a mobile virtual network operator which allows Equity Bank customers to deposit cash with the bank and borrow loans.
Equity Bank processed 74 per cent of the loans disbursed this year through its mobile phone platform Equitel, the lender’s management said Monday.
The bank said 1.2 million loans worth Sh5.4 billion have been processed through Equitel in the 10 months to October compared to 438,000 loans — of higher individual values though— issued through credit officers in branches.
“The cost reduction of doing 75 per cent of all our loans without staff involvement is huge. We are happy that eventually we have an auto channel for the asset side (lending business) of the bank which means people can borrow 24/7,” said the bank’s chief executive James Mwangi during an investor briefing.
Free money transfer
Equitel is a mobile virtual network operator which allows Equity Bank customers to deposit cash with the bank and borrow loans.
It is also used for transfer of cash within the bank, to other banks and mobile money platforms.
Equitel has 1.3 million subscribers of whom 88 per cent are said to have activated mobile banking services. The cumulative number of transactions conducted through Equitel stood at 113.2 million as at the end of last week, valued at Sh77.6 billion.
“The average number of transactions on the new mobile platform has increased from an average of two per customer per month to 21,” said Mr Mwangi.
He said the average amount transferred to M-Pesa through Equitel is Sh4,977 compared to Sh43,903 between Equity Bank customers.
“This shows that mobile telecoms are purely for money transfer not banking. The banks connecting with telecoms are not serving their customers but those of the telecom,” said Mr Mwangi.
Equity is pushing to challenge M-Pesa’s market share in the mobile money sphere through Equitel. The bank is offering free money transfer within its network and a maximum fee of Sh200 for bulk transfers to other banks.
Beginning December, Safaricom plans to increase the commission charged on bank customers who move money from their bank accounts to their M-Pesa account or those of third parties.
Safaricom will charge the bank customers at the same rate as those incurred by customers sending money from their M-Pesa accounts to other M-Pesa subscribers up from the current flat rate of Sh33.
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