MICROCAPITAL BRIEF: CARE, Orange, Equity Bank Partnering to Bring Mobile Banking Services to Savings Groups in Kenya

26-March-2012

CARE International, a Swiss NGO aiming to reduce global poverty; Kenya’s Equity Bank; and French telecommunications operator Orange are launching a partnership to provide savings groups with banking services using mobile phones. CARE village savings and loan associations (VSLAs), also known as savings groups, will be able to make deposits and withdrawals at Equity Bank and Orange agents’ locations. The number of agents throughout the country has not been disclosed. The accounts will return 2.5 percent annual interest rate.

As of June 2010, CARE International reported total assets of EUR 592 million (USD 782 million). As of December 2010, Equity Bank reported total assets of USD 1.66 billion and 525,000 active borrowers. As of December 2011 Orange’s sales stood at EUR 45.3 billion (USD 60.1 billion).

So far, 25 Kenyan savings groups have enrolled in the program with 175 saving groups scheduled to start in September 2012. Lauren Hendricks, Executive Director of CARE’s Access Africa program, reportedly said “Community-managed VSLAs are an important first step to financial inclusion for many of the poorest households. VSLAs help vulnerable members develop financial skills and build assets. For many members, the merger of mobile payments with financial products specialized for groups will allow VSLAs to become an on-ramp for formal financial inclusion.” 1

By Amira Berrada, Research Associate

About CARE: CARE International (CARE) is a Switzerland-based non-governmental organization with global poverty reduction programs aimed at developing women’s economic capabilities. Founded in 1945 with the aim of sending supplies to post-war Europe from America, it has evolved into a multipurpose humanitarian organization. As of June 30, 2010, CARE reportedly supported 905 projects in 87 countries that reached 82 million people. That year it reported total assets of EUR 592 million (USD 782 million).

About Equity Bank: Founded in 1984, Equity Bank is a microfinance bank based in Nairobi, Kenya, that provides loans, savings and fund transfer services. In 2008, the Equity Bank Group expanded into South Sudan and Uganda. As of December 31, 2010, Equity Bank reported to the US-based Microfinance Information Exchange (MIX), total assets of USD 1.66 billion, a gross loan portfolio of USD 925 million, return on assets (ROA) of 6.43 percent, return on equity (ROE) of 28.6 percent and 525,000 active borrowers.

About France-Telecom Orange (Orange): France-Telecom Orange is a French telecommunications operator with 172,000 employees and 226 million customers in 35 countries. Annual sales in 2011 were EUR 45.3 billion (USD 60.1 billion). Orange offers both mobile telephone and broadband internet services.