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From: zebra4o11/2/2009 10:59:07 AM
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Three million customers and still counting: the bank getting rich by helping the poorHomegrown lender draws in customers shunned for decades by multinationals

n his 14th floor corner office overlooking the city, James Mwangi sits at the very top of Kenyan society. He got there by understanding the needs of those at the bottom.

Mwangi is the CEO of Equity Bank, a homegrown company that has turned the financial services industry on its head. For decades multinationals such as Barclays and Standard Chartered dominated Kenya's banking sector by focusing almost solely on the middle and upper classes. Equity went the opposite way. It targeted the unbanked poor - "the watchmen, tomato sellers and small-scale farmers" whom Mwangi lists as typical customers - with cheap savings accounts and microloans backed by unusual guarantees.

The strategy has proved remarkably successful. In just a few years Equity has gone from being a quirky, fringe player to the third most profitable bank in the country and one of leading companies on the Nairobi Stock Exchange. It claims to have signed up its three millionth customer last month, giving it a 50% share of the Kenyan market for the first time, and is opening 4,000 new accounts a day.

"By focusing on the previously excluded Equity has revolutionised the banking sector," said James Shikwati, director of the Inter Region Economic Network, a thinktank in Nairobi. "It has forced the multinational banks to change their business strategies."

[MORE]

guardian.co.uk
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