Equity Building Society of Kenya Reaches Rural Markets

This case study outlines the strategy employed by the Equity Building Society (Equity) of Kenya to expand its rural outreach. The paper:

• Presents a brief background of Equity;
• Provides details of donors and investments in Equity.

It then outlines Equity's strategy to expand its outreach in rural areas, as follows:

• Revision of its mission to reflect its actual clientele;
• Expansion of offerings to include new kinds of loans and savings accounts;
• Active marketing;
• Introduction of new products specially developed for agricultural customers;
• Improved management information systems (MIS);
• Establishment of mobile banking units.

The paper lists the following results of this strategy for Equity:

• By the early 2000s, became one of Kenya's leading MFIs;
• Deposits grew by more than 40%;
• Had 10 new branches in the largely rural Central Province;
• Mobile banking units reached 21 isolated communities.

It lists the following lessons learned from Equity's experience:

• The approach to expansion needs to be market-driven and customer-focused;
• Mobile banking units are a viable way to reach clients in remote areas;
• Flexible rural delivery mechanisms can deliver a number of different services;
• There is a need for a sound MIS to back technological innovation;
• Emphasizing institutional capacity building is a proven tactic to garner donor support.

The paper concludes by emphasizing the success of Equity in the areas of institutional adaptability, mobile banking and outreach to rural areas.