Equity woos joint account holders with new security

Equity Bank, through Equitel mobile banking, is wooing joint account customers with a new security feature which enables them to sanction withdrawals from wherever they are.

Equitel’s PIN verification for joint mobile money account withdrawals will also enable users to manage shared savings without the requirement to physically meet and sign documents before a transaction is effected.

The ‘‘multiple approval’’ feature allows a user of a joint account to request a withdrawal, with the system prompting the other account signatories to enter their PIN to approve the withdrawal request.

The lender expects the new feature to make it easier for multiple account holders to transact on the same account by replacing signatures with PINs.

Users will initially have to link their phone lines to the joint account in order for the feature to be activated, Standard Investment Bank said in a note to clients last Friday.

In April this year Equitel, which has 2.2 million subscribers, raised by 15 times the amount customers can borrow through the Equitel mobile banking highlighting the growing importance of the platform to Kenya’s largest lender by client base.

Customers can now borrow up to Sh3 million compared to the previous Sh200,000 with the maximum repayment period now stretched from a month to 12 months.

READ: Equity Bank raises by 15 times the amount customers can borrow through phone

The new product —dubbed Eazzy Plus Loan — was in response to demand by its Equitel customers, the bank said.

“We believe that in the next few years Equitel will do five more times the number of transactions of all other channels put together,” said Equity Group chief executive James Mwangi at the time.

In 2015, Equitel’s 1.7 million customers transacted a total of Sh151 billion while the value of Equitel loans stood at Sh8.5 billion, according to the lender.

Mr Mwangi said the increased use of Equitel to access credit “will benefit users since the loan repayment rate through the mobile platform is better than other channels.

“We can significantly reduce the cost of borrowing for our customers,” he said.

The Equitel platform was unveiled in August last year with the bank noting that 1.9 million customers used it to apply for loans compared to 533,000 who applied physically.

In 2015, the bank’s ATM transactions reduced by six per cent to 30.4 million.

Micro and savings loan products by banks have gained huge popularity with several other lenders reporting similarly phenomenal growth.

KCB Group chief executive Joshua Oigara recently said mobile and agency banking were driving most transaction volumes, with about 70 per cent of transactions driven by mobile.

“If you talk about 10 transactions we have seven of them comprising mobile and agency banking,” Mr Oigara said.

Mobile-based bank account KCB M-Pesa has disbursed a total of Sh10.3 billion in loans to its customers since March last year, indicating a growing appetite for short-term loans.

The platform has been advancing between Sh25 million and Sh30 million in loans daily over the past 17 months of operation.

The joint venture between the bank and Safaricom has signed up 6.4 million account holders with over Sh286 million saved on the platform.