Loans borrowed from Equitel mobile money have hit Sh4 billion since its launch, underlining the vast potential of mobile banking in the country.
Equity Bank CEO James Mwangi said an average Sh5,000 is borrowed daily, with most borrowers using the ATM non–card option to access the loans.
“This is one of the reasons for the spike in transaction amounts. The service allows users to access loans 24 hours a day,” said Mr Mwangi on Thursday, “We have exceeded by far the target, and the amount disbursed has doubled in three months.”
Equitel has so far issued 1.2 million SIM cards, with transactions hitting Sh7 billion by August. The mobile money transfer is using innovative approaches to reach customers with record applications of “chama”, reminders and loan disbursements.
Mr Mwangi said that as more Kenyans pay their utility bills, pay for transport and conduct cross-mobile money transfers, 120 transactions will be carried out per client in a month.
“The transfers explain why competition is becoming stiffer. Equitel has a higher quality in terms of convenience, quality and seamlessness. We launched in June and we are attracting users daily,” said Mr Mwangi.
The update follows the Central Bank of Kenya’s intervention in a war that has seen Equity Bank and Safaricom bitterly feud over higher bank-to-M-Pesa surcharges.
Equity accused Safaricom of increasing the charges to frustrate its entry into the lucrative mobile money business through Equitel.
Safaricom’s tariffs had raised fees charged on Equitel but have since been lifted following interventions from Mr Mwangi and the CBK.
The CBK now plans to set up a payment services management board, the Payments Association of Kenya. It will draw in telcos, switch operators, aggregators, electronic-money issuers, banks and other financial services providers.
Among organisations supporting the new body is Financial Services Deepening (FSD). The head of FSD, Victor Malu, said the platform will bring “Equity Bank and Safaricom to the same table to talk about payments, inter-operability, eventually lowering the cost of transactions.”