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Reaching the Long Tail of Banking in Kenya

Recently I wrote an article on DrumNet, which is a mobile based information exchange for farmers in rural Kenya, who’s banking partner is Equity Bank. Yesterday at the Kenyan Investment Conference I was able to track down and spend some time with the president of Equity Bank, James Mwangi, and Allan Waitata, to discuss some of their background and their future as it relates to technology.

Interestingly enough, Equity Bank built itself up as the “common Kenyan’s” bank by going after the rural customer with only a small amount of income. They have built this business up over the years until it has displaced the other more established banks in Kenya – they now hold the largest market share of people at 1.2 million (33%). [You can read more about the history and mission of Equity Bank, read African Path’s interview with James Mwangi.]

So, here is a bank who is building into the long tail – that great theory that made Google the giant on the internet, which has fueled Wal-Mart’s growth, and that is making billions of dollars at Apple with iTunes. The basic tenant is that Equity Bank is reaching more people and making less margin per transaction, but because they’re making so many transactions they are very very successful.

Here’s a graph to illustrate the banking industry in Kenya:

The Long tail of banking in Kenya

As can be seen, there is a great deal of business to be had by reaching this under served demographic. However, to reach that demographic takes a good deal of work, a proper word-of-mouth marketing campaign, and a solid service offering worth talking about. Judging by the lines at the Equity Bank sign-up tables here in Atlanta, they’re doing all three things very well.


  1. Very interesting analysis. I’ve been examining this concept of the “long tail” myself (still trying to figure out how to implement it practically) –anyway, this equity bank is really something. I think one key you forgot to mention is honesty. When it comes to banking or just any business in Kenya, if people know that you are HONEST and that you will not steal or misuse their money, you will win in the end. I’m just surprised that more businesses haven’t realized how important it is to conduct one’s business with honesty and integrity.

  2. Great post, Hash. I agree with KE, your analysis was insightful. The long tail that you described, I would guess, is synonymous with the “base of the pyramid” concept. It’s catching on really big with the large corpoartions.

    One day, perhaps a few months ago, I was watching a TV news magazine and a US fortune 500 company’s CEO was being interviewed by a journalist. When the journalist asked this CEO where the next business frontier is most likely to be found, the CEO began talking about the base of the pyramid. The rational was that the fortunes have already been made in mid and upper-end markets, the only one left is the base of the pyramid market.

    From day one this has been the strategy of one of America’s well known entrpreneurs-Majic Johnson. This strategy is likely to propel him into the billionaire status within a few years, so it is definitely something for business people to think about…

  3. Interesting that you bring up Majic Johnson. I remember watching a special on the types of businesses he’s setting up within the inner city areas of large metro areas. Basically, areas that are forgotten and given up on, but that he turns profitable.

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