Equity Group Holding, Kenya’s biggest bank by market value, expects its financial-technology unit to bring in as much as 2.2 billion shillings ($22 million) of revenue in its first year of independent operations, according to Chief Executive Officer James Mwangi.
The bank “has resolved to make Finserve an independent commercial subsidiary,” Mwangi said in a statement published in the Nairobi-based Sunday Nation newspaper. The unit serves 1.96 million subscribers on its mobile-banking platform, Equitel, he said.
The unit, Finserve Africa Ltd., became an independent entity this year and facilitates cross-border transactions in seven Eastern African nations worth 2 billion shillings each month, according to the statement. It has a startup capital base of 1 billion shillings and its assets are valued at 1.98 billion shillings, Mwangi said.
The wholly owned subsidiary will use its parent’s partnerships with companies including American Express Co., Alipay and WeChat to capitalize on global transactions and payments through Equitel, which operates Equity’s Jenga Payment Gateway.
Equity introduced Equitel in May 2014 as profitability from some regional units declined, and to take advantage of Kenyans’ affinity for mobile money for payments and micro-loans. Kenya’s biggest mobile-money platform known as M-Pesa, belonging to the local unit of Vodacom Group Ltd., processed 1.48 trillion shillings of transactions in the first quarter, or 79 percent of the country’s total.
Finserve has been in negotiations with six Ethiopian banks on cross-border mobile payments and e-commerce, Managing Director Jack Ngare said in August. Ethiopians living abroad sent about $4.6 billion back home last year, about a quarter of the nation’s annual foreign-exchange earnings.