Norfund has invested in banks and other financial institutions for more than ten years, and the investments in the sector currently make up a third of Norfunds total portfolio. We see local banks as that focus on the bottom of the pyramid both in the business and private markets as important means to increase our capital outreach to where it is needed most.
On January 16th 2015 Norfund and NorFinance bought 12,223% of Equity Bank in Kenya. Equity Bank is the second largest bank in Kenya, and has a total of 9.5 million customers in Kenya, South-Sudan, Uganda, Rwanda and Tanzania. The bank has about 8 000 employees and is listed on the Nairobi Stock Exchange.
The main customer segments of Equity Bank are “bottom of the pyramid”: Previously unbanked individuals and small and medium sized enterprises. The bank serves a total of 9.5 million customers, and is one of the few banks globally that has succeeded in developing a scalable business model for efficient, high quality service delivery to a mass market in a developing country. Equity Bank is about to launch a new mobile banking platform, and scale up activities in the region outside Kenya. To succeed in this, it needs strong partners such as Norfund and NorFinance. Equity Bank also has a strong focus on women, both with adapted products and training programs for female customers, and with female representatives both on the Board of Directors and the top management team.
Delivering high quality financial services to a large market is highly capital intensive, and to improve product quality, costs and efficiency of the banks it is important to utilize scale. Equity Bank is one of the few players globally that has grown to a level where they can carry the costs of e.g. developing high quality mobile banking services to the mass market in a developing country.
Norfund and the partners in NorFinance are sure that the investment will be of high value both to our organizations and to the development of the bank. Equity Bank is registered in Kenya, paying local income tax amounting to 450 million NOK in 2013.