Equitel users transact more than Sh115bn in 2015, CEO says

Equity Group Holdings Limited CEO James Mwangi speaks during the launch of Equitel.

The customers of Equity Bank's mobile banking platform Equitel transacted over Sh115 billion last year compared to Sh4.7 billion in 2014, the lender has announced.

The number of transactions recorded increased from 13.7 million in 2014 - the platform was launched in August 2014 - to 151 million in 2015.

Equity Group Holdings chief executive James Mwangi said the shift to Equitel has helped the bank cut its operating costs.

“Mobile and online banking have become key platforms for our customers hence this will remain a priority as we switch into digital banking,” said Mr Mwangi.

Equitel combines both banking and telecom services including voice, data and SMS services on a single SIM card.

By last December, the bank had issued over 1.7 million Equitel SIM cards of which 90 per cent are actively being used for mobile banking, it said.

“Our customers are elated with the free money transfer offering and other features. This has seen them recommend Equitel to more people hence helping us reduce our marketing costs,” said Mr Mwangi.

Equity Bank has for the first time in 25 years seen a reduction in staff costs, which it has attributed to the successful roll out and adoption of Equitel.

“Few customers are visiting the branches and this might lead us into retiring the old brick-and-mortar structures as online banking becomes part of our lifestyle,” said Mr Mwangi.

The volume of loans disbursed through Equitel reached Sh8.5 billion, accounting for 78 per cent of total loans issued by the bank.

About 72 per cent of the lending went to small and medium businesses.

“We receive about 80, 000 applications for loans on a daily basis out of which only 1,000 comes through the branches. The average monthly loan is Sh7,000 while customers applying for one-year loans take up to Sh120, 000,” said Mr Mwangi.

Equitel is seen as the bank’s biggest growth driver in 2016.  “Before the end of this year, Equitel will do more transactions than all other channels put together,” he said.