One common feature of the profitable banks in Kenya is their adoption of mobile banking to increase profitability. The trend is testified by a finding by the Financial Sector Deepening survey which reported that mobile banking account usage in Kenya increased by 8 percent in 2019, while the use of traditional bank accounts declined by an average of 2.1 percent during the same period. The half yearly results of the leading Banks also reflect the emerging preference for mobile banking transactions.
Kenya Commercial bank, the country’s largest lender by assets, reported that its business in the last 6 months outside branch grew from 87 percent to 96 percent of total transactions, mainly driven by mobile transactions. The bank, in its half-year result, reported a 5 percent growth in profit after tax of Sh12.7 billion in 2019. The non-branch revenue of the bank reported a 131 percent growth. As of June 2019, KCB’s share of mobile transactions accounted for 78 percent followed by Agency and internet banking at 14 percent. The Bank Chairman Mr. Oigara observed that “The investment in technology generated a positive return and further helped drive efficiency and deepen access to affordable financial services in all markets.”
Recently, Equity Bank, Kenya’s largest retail lender by customers Equity Group also said in its half-year results that its mobile transactions rose to 77.4 percent, compared to 76.4 percent recorded in the previous year. The bank’s Eazzy app transactions recorded a growth of 28 percent to reach 146 million against 114 million transactions while Equitel transactions rose by 5 percent from 121 million to 126 million transactions. Additionally, 93 percent of loans disbursed during the period were mobile loans. The Bank’s half-year net profit surged by nine percent to Sh12 billion.”We are positioning ourselves to create new bridges of opportunity for Kenyans by combining the empowering nature of access to credit with the reach and transparency of technology” said Equity Group Managing Director and CEO James Mwangi .
