Equity Bank CEO James Mwangi poses with trophies he received after audit firm Ernst and Young named him EY World Entrepreneur of the year 2012 at an awards ceremony held in Monte Carlo’s Salle des Etoiles, Monaco last year.    [PHOTO: FILE/STANDARD]

By KENNETH KWAMA

The man who changed the face of banking and recruited millions of peasants into the industry, James Mwangi was an early riser in school who never showed any ambitions beyond passing his high school exams.

A former managing trustee at the National Social Security Fund (NSSF) who was the Mwangi’s roommate at Kagumo High School told The Standard there were no hints of Mwangi’s potential back then.

“He would wake up very early in the morning and sit on the bed as he brushed his shoes. He was never loud, but we noticed the meticulous manner in which he did his stuff. He transferred this character to the bank and made it what it is today,” said the former NSSF boss who requested not to be named.

When Mwangi joined Equity in 1993, it was a struggling building society, it had already been declared technically insolvent. It was making losses in excess of Sh5 million every year and was facing a cumulative loss of Sh33 million. The staff had not been paid salaries and morale was low.

READ MORE

 KCB beats Equity in profits race as earnings after tax hit Sh44.5b

 Equity Bank walks talk on cutting loan charges as others hesitate

 It's a close shave for Kirimi in Nanyuki

 Africa governments need to invest more in laboratory services

But change was not only happening at the building society. The entire banking industry, which was then dominated by multi-nationals, was undergoing a transition.

BIG BANKS

To maximise profit, the big banks were closing branches that were deemed as non-performing, mostly in rural areas. This inevitably meant they had to retrench workers too.

Mwangi saw the gap, but Equity Building Society was too broke to fill in where the big banks had exited.

Unable to expand immediately, he sought to do the bit that didn’t require capital-change the internal culture at Equity.

 He decided to focus on customer care. Customers, many of them peasant farmers, were given red carpet treatment. Tales began to blossom about farmers who would come straight from their farms with muddied gumboots and go straight to the banking halls.

 When Mwangi took over as the strategy and finance director, Equity had 27 employees, 27,000 customers, five branches and stood at number 66 out of 66 in the financial sector rankings.

Having laid the foundation for banking, on the last day of August, 2004, Equity made its biggest and boldest step. It became a bank.

It got into partnerships with international lenders, adopted up-to date information technology platforms and began its astounding growth.

Today, the international banks that exited rural Kenya fearing losses are back to the grassroots fighting for the same customers with Equity Bank.

From a loss of Sh5 million in 1993, Equity registered a profit of Sh12 billion in 2011. It now has the largest banking customer base in Africa and the rest of the world has appreciated these efforts through the numerous awards that Mwangi has won over the years.