Business
Kenyan banks, awash with cash, looking to expand beyond East Africa
“Lessons learnt from launching these mobile-based products can prove a key differentiator as can partnerships like the Equity Bank and Airtel one. These can make them more competitive in the retail space,” said Kamau.
But replicating the success in new markets like Malawi could prove a challenge. According to a Finscope survey on the Malawi banking sector, 80 percent of the Malawian population is unaware of mobile money and out of the remaining 20 percent who are aware, only 22 percent use the service.
In Kenya, 80 percent of the population is registered with mobile money services, while mobile phone penetration in Malawi is at approximately 30 percent.
The uses of alternative delivery channels are also important in reducing the cost to income ratio and growing customer satisfaction.
For example, more than a third of all banking transactions done by the Kenya Commercial Bank, the Co-operative Bank and Equity Bank are through either agency or mobile banking, with the former putting the figure at 50 percent.
However, there are numerous challenges. Southern African companies have struggled to break into the Kenyan markets, a factor that has largely been blamed on the different management cultures in the 2 countries, while Nigerian banks operating in Kenya continue to struggle.
“The key to a business entering new markets is to try to be as local as possible – in terms of things like whom you hire. You also have to build genuine relations with employees, government and supplies,” said Philip Kinisu, the former chairman of PriceWaterhouseCoopers Sub-Saharan Africa.
“Also, it is important to always remember that just because it worked in one of your markets does not necessarily mean it will work in another market,” added Kinisu.
