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Equitel to overtake M-Pesa by 2018, says Mwangi

by admin
June 12, 2020
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Equity Bank CEO Dr James Mwangi has set 2018 as the year that Equitel, the banking group’s wholly owned telecom company, will overthrow Safaricom’s M-Pesa to become the biggest mobile money platform in Kenya.

Speaking when he announced the banking group’s financial results for third quarter 2016, Mwangi said Equitel performance in the last one year was an indication that it was on course to become the biggest mobile money platform in the next three years.

“In just one year after the launch, Equitel has taken 15 percent market share in mobile transactions. By the end of this year, we have gained another 15 percent. In three years, we will be the biggest mobile money platform in Kenya,” said Mwangi.

During the period under review, subscribers increased by 400,000 to 2.42 million with 94 percent of the subscribers linking their mobile phone lines to bank accounts.

Banking transactions conducted through increased by 198 percent in 12 months to 313 million while the value of the transactions increased by 498 percent to Sh320 billion. 4 million loans valued at Sh30 billion were lent out through the mobile banking platform also known as EAZZY Loan.

“This is the biggest value of loans disbursed in Kenya through a mobile platform,” said Mwangi adding that loans repayment through the digital channel was 98 percent.

The bank’s interest earning deposits increased by 81 per cent one month after the interest rates capping became effective indicating that bank customers are using their bank accounts to generate extra income.

The law requires that banks pay a rate not less than 70 percent of the base rate published by Central Bank of Kenya (CBK). According to numbers released by Mwangi, interest earning deposits which include ordinary savings and fixed deposits grew to Sh71.1 billion in the third quarter ending September from Sh39.6 billion the period last year.

Fixed deposits grew the most at 85 percent to Sh70.5 billion from Sh38 billion last year.

“This is a trend we have observed in the one month since the interest rates caps became effective. When market trend shows that there has been a shift in the markets to government securities as evidenced by the over 300 per cent oversubscription of treasury bills, the growth in our interest earning deposits is a vote of confidence in the strength of the bank,” said Mwangi.

The banking group’s net profit increased 16.9 percent to Sh15 billion from Sh12.8 billion the period last year. Interest income grew 25.9 percent to Sh39.8 billion from Sh31.6 billion pushing total operating income up by 15.3 percent 48.9 billion from Sh42.4 billion.

Tags: CBKEquitelEquityJames MwangiM-Pesamobile money
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