Remittances: Equity Bank Limited Builds a Successful Alliance with a Money Transfer Operator to Offer Remittance Services (Innovation Brief)
This paper describes the effort of Equity Building Society (EBS), in alliance with Western Union, a money transfer operator, to offer remittance services. The paper also provides information on the ownership, range of financial products and the market niche for EBS.
The paper discusses the process of EBS entering into contract with Western Union and explains that EBS:
- Serves as a distributor, as well as a sender of remittances;
- Offers internal or domestic remittance services from urban to rural areas through wireless area network (WAN) and mobile village outlets.
It explains the innovative strategies in launching its remittance services. These include:
- Marketing strategies:
- Mailing and media advertising;
- Online advertising;
- Speedier services as compared to other service providers;
- Provision of links to other financial products.
The paper explores the challenges and opportunities of remittances for EBS, listing the following challenges:
- Increasing competition from sub agents;
- Sharing commission with the agent;
- Paying for promotion and positioning;
- Pricing the services.
The paper presents the implications of remittances for microfinance services providers. It explores the future plans of EBS, including designing a loan product for housing with remittances.
The paper concludes by analyzing the impact of remittance on the core business of EBS as:
- Enhancing brand image due to association with a strong international brand;
- Increasing commission income due to remittance fee.
