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Engineers Conference 2012
Financing Projects County
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Equity Bank at a Glance
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About Us2.
NSE Publicly Listed/Cross Listed at USE 4rd largest company at the NSE
Shareholders Funds KES 32.9 Billion Largest bank by customer numbers Total Assets -KES 208.9 Billion Over 30,000 shareholders Strategic Investors
Helios EB British American Insurance
Staff: Individuals/ESOP 11 Directors
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Uniquely combining shareholder value with social impact
Key Initiatives / Strategy
ContinuingRoll-out and
Embedding of Agency Banking
Enhancing Mobile Telecommunication
Solutions / ICT Investment
Brand Development and Impact Investment
Bank has embarked on a number of initiatives to create brand awareness and develop the local economy Wings to fly program- 3,486 scholarships awarded to bright
needy students to date with a target of 10,000 by 2015
Financial Literacy Training (FIKA) Program- 314,952 people trained already with target
to train 1,000,000 people by 2014
The Bank embedded the agency model in 2011 which allows the Bank to leverage on third party infrastructure for cash transactions
Extremely successful initiative which has seen the number of agents increase from just 875 at the beginning of the year 2011 to 3,991 agents by March 2012 (c.356% increase) – Agency banking now contributes more than
20% of all cash transactions
No of Operational AgentsJan-11 to Mar-12 Growth Trend
The Bank have made large investments in ICT and continue to enhance their mobile banking services / solutions
– Mobile banking customers have increased from 417,194 in January 2011 to 1,553,865 by end of March 2012 (c.272% increase)
– Eazzy-247 connected to all the 4 telcos
Number of EAZZY-247 Customers
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Taking Banking Services to the People
Number of Customers Number of Branches
Number of ATMs Number of POS
21%14%
10%130%
144%
MM
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Q1 2011 Q1 2012
6.27.5
Q1 2011 Q1 2012
163
186
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Our Regional Footprint: Traditional and Alternative Channels3.
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Understanding The Opportunity
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• Only 5 counties are more than 50 percent urban; a strong indication that the demand for infrastructure projects will soar upon the creation of the county governments. This presents a major opportunity for all projects stakeholders.
Low Levels of Urbanization
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Varying Capacity to Meet Service Delivery Costs
• Counties will have varying needs for project funding with the more rural Counties presenting a greater need for external financing.
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County Pattern of Infrastructure Development
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Relevant Product Features
Asset Financing 4.
Product Definition Asset Finance is designed to assist our SME customers acquire capital assets for their businesses through installment finance. This will work the same way that the current vehicle finance is working, with only a few adjustments on terms and collaterals due to nature of assets.
Loan Amount Minimum = Kshs. 0.3mMaximum = Kshs. 10mWhereas this is the target market, we shall remain open to amounts above kshs 10m. Audited (formal) financials will however only be required where loan amounts exceed kes 5m, though again we acknowledge that many of the local business people run sizeable but very informal businesses.
Interest Rates The rates will largely remain the same, though we may have exceptions as proposed under loan processing costs. 14% pa flat rate
LPO Financing 4.
Product Definition This is a short term loan granted to customers, supplying to Government of Kenya and its related bodies for working capital funding. It is meant to ease the customer’s cash flows, by giving upfront value to their LPOs. The bank has recourse to the client in case of non-payment.
Loan Amount The Bank shall discount not more than 80% of the VAT exclusive value of any confirmed LPO presented;
Maximum loan approved will depend on the customer’s repayment ability.
Any other requirements in excess of the above to be considered on case by case basis.
Interest RatesCommission :2% Flat rate (recoverable upfront)
Interest rate : 25% p.a. reducing balance for the discount period (recoverable upfront).
Lodgment fee : Kshs. 1,000/= per LPO financed.
Retirement Commission 0.25% of loan amount (minimum Kshs. 2,500/= and maximum Kshs. 10,000/=).
Invoice Discounting 4.
Product Definition This is a short term loan granted to customers, supplying to Government ofKenya and its related bodies for working capital funding. It is meant to easethe customer’s cash flows, by giving upfront value to their invoices.The bank has recourse to the client in case of non-payment.
Loan Amount Minimum amount = Kshs. 100,000Maximum amount = N/A
Interest Rates Commission : 1% Flat rate (recoverable upfront)Interest rate : 25% p.a. reducing balance for the discount period (recoverableupfront).Lodgment fee : Kshs. 500/= per discounted invoice.Retirement Commission: 0.25% of loan amount (minimum Kshs. 2,500/= and maximum Kshs.10,000/=).Ledger fee: NIL
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Case Studies
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Revitalization of Cotton Industry in Kenya
A partnership between Equity Bank, the
Ministry of Agriculture, the Cotton
Development Authority (CODA), National
Irrigation Board (NIB), Cotton Ginners and
Bura Farmers Association has begun to
restore cotton production in Bura.
In this partnership, Equity Bank
provides credit for farm inputs and
payments to farmers while NIB is
responsible for maintenance of canals
that channel water to farms in the Bura
irrigation scheme.
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Empowering Households on Renewable Energy
Equity Bank with various stakeholders in biogas
promotion has been supporting households
mitigate the challenges of fuel in their homes.
This is one of the areas in climatic change
adoption as intensive farming continues to take
root.
Implementation of units will go a long way in
helping in mitigation of methane production from
the zero grazing units.
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Financial Literacy (FiKA) and Entrepreneurship
Equity Group Foundation and The MasterCard
Foundation have partnered to offer free financial
education and entrepreneurship targeting 1
million women and youth across the country by
2014.
Equity group hired master trainers to implement
the FIKA program most of whom have master’s
degrees in entrepreneurship or a related field.
A pilot entrepreneurship training program for
10,000 youth and women focused on developing
practical and applicable business knowledge
have commenced.
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THANK YOU!