NCBA Group is set to launch its M-Shwari mobile phone banking services in Ghana, Ethiopia and the Democratic Republic of Congo (DRC) through partnerships to become a regional bank.
The Kenyan lender, which also has a presence in Tanzania, Uganda and Rwanda, is in talks for partnerships with banks and telecom operators in the three countries for mobile phone banking services.
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This signals that the Kenyan bank will seek to earn transaction fees on setting up physical operations in Ghana, Ethiopia and DRC.
Kenyan commercial banks are looking beyond their borders for acquisitions and partnerships, seeking to tap into opportunities outside of East Africa, which are being driven by rapid economic growth and trade integration.
The NCBA reaped huge profits from mobile phone lending in Kenya after teaming up with telecom operator Safaricom in 2012 to launch the dominant service, M-Shwari.
He wants to replicate this model outside of East Africa, especially the pristine markets of Ethiopia and DRC, which have huge populations and a banking sector that is mainly focused on large corporations, which makes them attractive. for ambitious regional state lenders seeking retail and small business lenders. traders for growth.
“In new markets, the model will be to work with local banking and mobile partners to deliver our products,” NCBA Group Chief Executive John Gachora said in an interview.
“Countries of interest at the moment remain Ghana, Ethiopia and DRC – these added to our current five would make it eight countries.”
He did not disclose which banks and telecom carriers NCBA is looking for in the three markets. Telecom operators have expanded mobile financial services across Africa after the idea was pioneered by Safaricom with its M-Pesa service in 2007.
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Kenyan lenders have turned to technology in response to competition from mobile-based financial services.
NCBA has partnerships in the regions with other telecom operators, including M-Pawa in Tanzania with Vodacom, Mokash in Uganda and Momokash (Cote d’Ivoire) with MTN.
The bank says the partnerships will be key in expanding its digital lending business on the continent.
“As NCBA, we are looking to start looking at digital financial services as an export product beyond Kenya and into the region,” said NCBA Director of Digital Affairs, Erick Muriuki.
“The objective here, of course, is to make sure that we can diversify our income beyond Kenya and be able to see that we generate a lot more income from digital commerce outside of West Africa. ballast.”
Ethiopia’s public mobile operator, Ethio Telecom, launched the mobile-based financial service, Telebirr, last May.
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It allows users to send and receive money, deposit or withdraw money from designated agents, pay bills at various merchants, and receive money sent from abroad. Safaricom was given the green light last month to launch M-Pesa in Ethiopia, the first time foreigners were allowed to offer the service and smooth the market for NCBA.
Ethiopia’s banking sector is still one of the most tightly state-controlled in Africa and not open to foreign ownership.
The sector is dominated by the two oldest and most profitable institutions, Awash Bank and Dashen, among the 19 commercial banks with which Safaricom and NCBA are to enter into agreements to launch the first mobile phone loan product in Ethiopia.
The DRC became the seventh member of the EAC this year, taking the size of the bloc’s economy to over $245 billion. The nation of about 90 million people is the world’s largest cobalt producer and Africa’s top copper miner, whose retail banking and fintech market is tiny, but not not yet very active in lending via mobile phones.
NCBA will have to battle with Equity and KCB, which have entered or are seeking to enter the Central African country through takeovers.
In August, KCB reached an agreement to acquire 85% of the capital of DRC’s Trust Merchant Bank (TMB), while Equity bought Banque Commerciale du Congo in 2020.
NCBA will transform its financial technology (fintech) business, which includes M-Shwari, into a standalone company in the race to create more personalized and feature-rich digital banking services for its customers.
This comes at a time when banks are increasingly turning to imaginative combinations of software, hardware and data to create and deliver new and traditional financial products and services.
It’s part of a global trend that has seen financial giants like Goldman Sachs and JP Morgan Chase invest in fintech for asset and wealth management, card businesses as well as offering savings accounts and loans. personal to retail customers.
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