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14/07/2014

Is KCB and Safaricom deal the answer to Equity Bank.

Equity Bank got a license for a mobile virtual network, in effect
jumping right into Safaricom's turf, Mobile money transfer. Mpesa is
the most ubiquitous mobile money transfer platform, but Equity Bank is
set to challenge this. Then enter the Safaricom and KCB deal, with the
biashara club. KCB has the largest branch network in the region, and
by teaming with Safaricom, kcb will benefit from the ubiquity of
Mpesa, while Safaricom will benefit from kcb's reach and credibility,
especially in lending to SME businesses. So, in effect safaricom is
uprgrading from a micro payments platform to the middle of the market
tier, through its Lipa na Mpesa merchants payment system, while kcb is
moving down the chain to tap the 20 million safaricom subscribers with
loans. Equity bank will attempt to do the same things, only that it
will not need to collaborate, as it is now both a bank and a telecoms
company. It will be interesting to watch how Bob Collymore, Joshua
Oigara, and James Mwangi react to the unfolding events.

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