Leading Kenyan commercial bank, Equity Bank plans to expand to 10 African countries in the next 5 years at cost of 200 billion shillings. The plans for that massive expansion are already underway with loan agreements for KSHS 36 billion already signed.
It has also created additional shares worth KSHS 20 billion that will be used to fund the acquisition process. The bank already operates in five East African countries; Kenya, Uganda, Tanzania, Rwanda and South Sudan.
The first phase of the plan includes entry into Ethiopia, Burundi and DR Congo before expanding to Mozambique, Malawi, Zambia and Zimbabwe in the next two years completing its second phase. The third phase that will take place in the next five years the bank will look to enter into West Africa focusing on Nigeria, Ghana and Cameroon.
The bank CEO Dr. James Mwangi announced that they will make acquisition in three countries but establish the bank from scratch in the rest of the countries. He explained the reason for acquisition as the difficulties experienced with starting from scratch thus alternative entry mode; acquire a medium-tier bank and swish it.
The said acquisitions will be funded by International finance organizations like Africa Investment Bank and International Finance Corporation.
Some of the reasons behind entry into some of these countries is Burundi being the only country in the region that the bank wasn’t present has urged the bank to set up shop. Equity looks to capitalize on the possible entry of Ethiopia into the World Trade Organization which will see the market opened to private investors who have been previously shut out by the law.
Some of the other countries like DR Congo and Nigeria are resource-rich and the lender is looking to tap into that as well as their large populations.
The lower and middle-class friendly policies of the bank it a preferred choice as it offers advice and low interest loans that help them expand and improve the quality of life of its members.