Equity building society of Kenya reaches rural markets
Reinsch, Myka | Pearce, Douglas
Equity Building Society provides microfinance services to more than 250,000 low- and moderate-income citizens in Nairobi and Kenya's Central Province, via a network of branch offices and mobile banking units. After a decade of extending long-term mortgage loans to an untargeted clientele with meager results, Equity Building Society (Equity) altered its approach. In 1994, the bank began tailoring its loan and savings products to a microfinance market, eventually adding two loan products for tea and dairy farmers that are secured by agribusiness contracts. By the end of 2003, Equity's deposit base had grown to US $44 million and loans topped $21 million. Thanks in part to strong donor support, Equity instituted a mobile banking program in 2000, with the purpose of efficiently reaching more clients in remote rural areas. Mobile operations have been successful, covering their costs, and accounting for more than $1.3 million in deposits in 2003. Mobile banking has also decreased branch congestion and improved the brand image and visibility of Equity. This case study outlines the strategy employed by Equity to expand its rural outreach.
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