Dr. James Mwangi, Equity Group, Managing Director and Chief Executive Officer in his office at Equity Centre in Upperhill.

When Kenyans wake up tomorrow morning, there may just be another surprise from Equity Group.
The giant organization has over the years churned out innovative solutions. We sat down with Dr. James
Mwangi to take stock of the memorable journey. Listen to him

By George Marenya

Banking is Dr. James Mwangi’s mother tongue if you wish to say so. If you want him to reel out juicy sound bites one after another, just ask him any questions around banking, finance, economics and human capital. But of course his pet subject remains his first love; Equity Bank. He says of all the choices he has had to make at the helm of Equity, regional diversification seems to have paid off the most.

When he made the decision to go  to the Democratic Republic of Congo ( DRC),  many wondered why he would take such a  risk,  yet the same investment would guarantee him a  thirty  percent return on equity locally. But a few years down the road, see who is smiling all the way to the bank.

While the  profit  from Kenya went down by 20 percent, this he says was   overcompensated by the   triple digit growth in some subsidiaries including :  DRC (142%), Tanzania (136%), and Equity Life Assurance Kenya,  (177%) as per the   quarter three   2023 results.

Ever the one to see the brighter side, he says for DRC :  “Things can only look better because the country is   going through a boom – it  has   strategic minerals which will be required for the next thirty years.”

What is more,  DRC is talking about consolidating her  democracy in a market where Equity   commands    27 percent market share. Equity is also the most innovative and technology advanced bank in  DRC.

Opportunities in DRC

According  to  Dr. Mwangi,  currently,  DRC is where Kenya was in the 1980s –  where only 6 percent of the population had bank accounts.  “That is why I said there is a long runway before you reach the headroom,” he avers.

The ceiling is too far

 Thirty years from now, Dr. Mwangi will be hitting 92 years. Venturing in DRC is an investment for future generations. “We have extracted the available opportunities for thirty years in Kenya. I am just laying the foundation, planting a tree whose shade I may never enjoy,” he explains adding that he doesn’t mind his successors reaping the fruits.

Despite registering a 20 percent decline in the Kenyan market, Equity Group managed to get a 5 percent overall profit from its subsidiaries in the region. That is already a testament of a prudent and far sighted decision to mitigate sovereign risk through geographical diversification. “What I saw  in  Kenya is what I foresee for Equity in the regions where we have spread our wings,”

Back to Kenya Dr. Mwangi is confident that we are almost out of the woods as we near an equilibrium. The global economic shock transmission found Kenya with internal weaknesses and fully exploited it.  Were it  not for the intervention of the World Bank with Kshs. 1.8 trillion shillings and a Kshs. 1 trillion from the International Monetary Fund (IMF), it would have been very difficult to keep the economy running.

Our  glaring weakness  was the interest capping which created an artificial interest rate in the market. When interest rates rose globally, our own rates went up much faster than any other market since we had artificially maintained it at 18 percent. With 18 percent as the sovereign risk, everybody took that as the risk free starting point. Customers found themselves looking at a 60 percent upward shock in interest from what they had been previously paying.

Equity Group CEO Dr. James Mwangi (left) and John Deere, Head of Business for Africa, Asia and the Middle East, Jason Brantley (right) sign a financing and collaboration agreement between the two organizations.

Artificially Strong Shilling

For the last six years, our economic system had artificially suppressed our exchange rate. As early as 2016,  the World Bank was concerned that we had overpriced the Kenyan shilling by between 18 and 25 percent. In two years, the Kenya shilling depreciated by close to 90 percent from Kshs. 112 to Kshs.  157 against the dollar. This translated itself into imported inflation. These circumstances took a toll on the economy.

We  should  not  forget  that a barrel of oil that was selling at USD 90 suddenly went up  to nearly 200 US Dollars.  Oil had not suddenly become expensive,  but  one  needed 40 percent  more shillings to buy the same barrel. These internal weaknesses have made us to struggle quite significantly.

The World Bank seems to be resolving that. Recently,  the Eurobond  shifted from 14 percent to 12 percent indicating that the sentiments are over and we  are  now dealing with the reality.

The shilling, it does appear will not depreciate any further and the market seems comfortable with the CBK’s rates offered for the recent infrastructure bonds. We will see a lot of foreign investors come back to buy the shares at the Nairobi Stock Exchange (NSE). They will be buying in dollars, consequently boosting our supply of dollars.

 “ The weakening shilling also means more tourists will come in the country since the dollar will earn you more Kenyan shillings and enable them to stay longer,” Dr. Mwangi states. He anticipates that tea farmers will see their tea valued at USD 3 per kilogram;  translating  into Kshs. 450  ( or there about)  instead of the Kshs. 350 per kilo giving them a windfall considering that costs of production will not have risen significantly.

Bank to Stability

“In the next six to eight months the market will have been restored to its rightful balance and we can move forward from there. This is why we see the need to make our balance sheet agile, flexible and responsive,” he remarks. He adds that should the demand for credit come back,  Equity will allocate resources fast enough to cater for their customers.

Knowing that all the foregoing was a temporary shock, Equity Group made the decision not to cripple the customer but instead to cushion him for a year or two. While the bank could  lend money to the government at 18 percent interest, Equity decided to give out loans at 16 percent interest to customers so as to supply capital in the economy.

 “ This time Equity Bank is using profit and loss while last time we used the balance sheet to stretch out repayment period for our customers during Covid-19,” says Dr. Mwangi.  As soon as Covid-19 ended, business bounced back and customers started repaying,  boosting the profitability of the bank. ‘If we start charging 30 percent because the government is giving 24 percent,  this will put most of our customers out of business,” he notes with concern.

He  further  says : “On the other hand our depositors cannot be stopped from demanding a higher rate because if the government is giving 18 percent, why would they not ask for 16 percent for instance?  So the shortfall will still reflect in our books. This is where we talk about standing with the customer.”

In the recent past,  Kshs 200 billion has  migrated from banks to buy government securities  because they are very lucrative. However, Equity Bank has been cautious not to pass all the cost to the customer by offering loans at fair interest rates.

Goose that lays golden eggs

Dr. Mwangi’s parting mantra: “Don’t kill the goose that lays the golden egg. That goose is the customer.”

Equity Group’s market dominance in the region allows it to be  a master  of trade. People looking for a bank with a strong diversified balance sheet that can support both imports and exports turn to Equity.  Buyers  and  sellers will  therefore be   in need of a bank that would enable effortless transactions when required.

Dr. Mwangi further    says  that   Kenya will not grow on the back of the   local   market. Kenya will be grown by exports. Essentially Equity can take a disproportionate share of the export market. The reality is that Equity Kenya is growing faster than the economy and even faster than the industry because it is being supported by the  regional business.

BOLD AND ARTICULATE: Dr. James Mwangi during the interview with Biashara Leo magazine.

“Our capital and balance sheet is strong. Liquidity is okay, the  non performing loans are well provided for so the quality of the balance sheet is good since we have not put future incomes at risk,” Dr. Mwangi  asserts. In spite of all the goings in the economy Equity still has a liquidity of 49.7 percent.

Dr. Mwangi believes deposits will migrate backward. The moment the market stabilizes , customers will receive better returns than what the government is giving. In the meantime, they must harvest hay while the sun shines.


The story of Equity since its foundation has been one of upsetting the apple cart. Not only has it disrupted the industry but it has disrupted its operations over the years.

Dr. Mwangi now takes us through  this  journey  in response to some questions:

BL Magazine: What are some of the things Equity Bank has done to increase customer base as well as customer loyalty considering how competition is stiff in the banking industry?

Dr. Mwangi : In the beginning,  we chose to remove the barriers of inclusion like :  ledger fees, working hours, introduction letters for accounting opening and the likes. We realized people neither liked nor trusted banks, we wondered how we could enjoy love from the customers.

This led to the model of shared prosperity. The public had to be made an anchor shareholder and stakeholder in the bank. This involved setting aside 2 percent of the total revenue, handing it over to the Equity Group Foundation and asking them to give back to the public through education scholarships, upgrading peasant farmers into agribusiness, investing in women and training youth through programmes like Young Africa Works and mainstreaming group lending.

Today,  Equity is the largest philanthropist in Africa through the Foundation.

BL Magazine: Equity enjoys a big customer base. Tell us more about it?

Dr. Mwangi : When a customer loves you, nobody can harm you. When the public loves you then you are protected. This explains our growth from number 66 out of 66 to number 1 in Kenya. This brand affinity is what we used to disrupt all the other markets.

When we defined profitability as a function of price and quantity,  we disrupted ourselves towards high volume low margin enabling us to take advantage of the mass market.

Yet as these graduated, we allowed everybody to settle where they were most comfortable. That  way,  we created supreme, corporate, retail branches all the way to agents and eventually Equitel  and  Pay with Equity for merchants.

This way,  our  customers   did  their   banking wherever they wanted. We did not mind addressing the pride and ego of the customer by making him choose in which class or segment he wanted to be served. Whoever  wants to sit on a cushy sofa, well and good. If you want to stand in the banking hall ‘goat in hand’ so be it.

Indeed,  if you don’t want to step out of the village,  your money will come to you to the last mile through the Equity Agent.

BL magazine: What are your objectives as a  Group going forward?

Dr. Mwangi  :  Equity remains true to its original goal of being high quality but inclusive and affordable. When the customers realize they are still held dear, they become ever more loyal. It’s not just a partnership but a bonding relationship.  Equity as a   plane does  not  have  one   propeller engine.  It  has   two massive engines which catalyze each other and create a circular ecosystem to offer all round solutions to the customer.

The  twin engines   are very favourable for collaboration. With the international development banks there is Equity Bank to create a linkage with. To the philanthropists and foundations there is the Equity Group Foundation to share ideas and work with.

This empowers you to create wealth through loans, LCs, trade finance and so on while the foundation offers capacity building which enables beneficiaries to enter the commercial space.

Equity Centre, Upper Hill, Nairobi.

BL Magazine: How has Equity Group Foundation helped in improving lives of beneficiaries?

Dr. Mwangi : Today our Foundation is the biggest mobilizer and recruiting platform for customers. So the story of Equity is one of constantly disrupting itself before moving itself to disrupt the industry as a whole.

BL Magazine:  What are   some of the measures that you put in place in order to sustain your growth?

Dr. Mwangi : Having become too big for a single market, the next thing was to transform the bank into One Equity and acquire several licenses and cross sell after segmenting the market.

With these came the rights to technology with which to seamlessly sell to the 19 million customers across the region. We also established  an insurance group offering life, general and health insurance selling to the same customers.

This has given us a big  a share of the customer’s wallet – payments, moving money, deposits, loans and insurance. The bundling together of several products comes with unparalleled convenience to the customers.

Digitization through the mobile platform  has also been  a boon since the cost of the mobile phone and airtime is on the customer. This has  reduced costs considerably through the massive customer uptake of our Equitel platform.

Machine learning, artificial intelligence and analysis have been used by Equity to develop models that are  more intelligent than a human being. That is why 95 percent of our loans are disbursed by algorithms. This ability to receive a loan within two minutes from anywhere has greatly enhanced operational efficiency for Equity.  This is  compressing of time and geography.  Convenience and ease of doing things makes us very competitive.

BL Magazine: Equity Bank offers many innovative solutions. What is the unifying product?

Having realized that the unifying product is payment, we have become masters by connecting with the fintechs and the global money transfer companies enabling us to control 60 percent of diaspora remittances to the country.

Locally, Pay with Equity is an intra-operable payment system. A shopkeeper only needs his phone to receive payments from any telco wallet or  bank. This way the retailer does not need multiple point of sale machines.

Our insurance has a tagline “The Insurance You can Trust.” Since our customers are originating from bancassurance we believe we know them so essentially we are not insuring a stranger.

We have their data on loan repayment and source of income so you can’t come and misrepresent yourself. We know how much we financed you and nothing can be tweaked at will.

BL Magazine: Equity is one of the top brands  in Kenya. How does that connect with agency and disruption in borderless banking?

Dr. Mwangi : Initially,  the agency banking was used to disburse social payments before being remodelled into a mainstream banking service. And of course the brand itself is the main disruptor by morphing from a banking brand to a lifestyle brand.

While we initially thought we were delivering convenience,  that is what delivered the Equity brand. The Equity brand became visible in village shops. These merchants became the defenders of our brand. With 66,000 agents and one million plus Pay with Equity merchants adopting and aligning with our business model, they automatically became our brand   ambassadors.

The beneficial relationship is that if a customer goes to deposit or withdraw money and then picks something from the shopkeeper in the process, then he gets this cash by dint of being an agent.

These agents also help in moving our insurance products since they are even more close to the customer.

Bottom Line

In its bid to include everybody, Equity has mainstreamed refugees into its financial offerings by helping them to start businesses in the refugee camps of Kalobeyei, Kakuma and Dadaab in Kenya. Others are Nakivale and Oruchinga in Uganda and Mahama and Gihembe in Rwanda.  Given  that some of these refugees have been around for 30 years, it only makes sense to consider them as part of Equity.

So what makes Equity tick? According to Dr. Mwangi, it is in the ability to seamlessly collapse strategy and execution. The very people who dream strategy must roll up their sleeves and participate in the implementation.

The story of Equity is a human story. It is the story of inclusion, self-determination and changing lives. It is a movement composed of a people who are determined to do something. Equity represents the African dream. It is about business with a soul and a face not just numbers.

Impacting society positively keeps Dr. James Mwangi going. He may not have dreamt of being the poster boy of banking. But the dream to change society and an obsession with solving problems has brought him to where he is.

It has been said if you want to plan for a generation, plant a tree. Equity’s dream of 35 million trees planted is now at 23.8 million with a survival rate of 95 percent. The road ahead is not steep here.

With the mantle of the Africa Recovery and Resilience Plan fully on his laps, Dr. Mwangi’s parting shot is that, planning is key.

If you fail to plan you are planning to fail. With this, we can only be sure that we have not heard our last from Dr. Mwangi. At Equity, as always, the fat lady has not yet sang. Just ask the British.



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