MPs criticism of Equity's CEO suspect

It now seems like a life time and Equity is not only an entity, it has taken the financial sector to another level. They made a staggering Sh 1.1 billion profit last year and they are not getting out of the news.

The institution is the fastest growing bank in Kenya. Its soaring share price is something to behold but for those who have read C.K. Prahalad, the man who wrote about the 'fortunes at the bottom of the pyramid' this is just proof of a known theory which many players in the banking industry have ignored and snubbed those so called poor unprofitable customers.

Prahalad argues, "the word's most exciting, fastest-growing new market is where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense untapped buying power. They represent an enormous opportunity for companies who learn how to serve them. Not only can it be done, it is being done--very profitable. What's more, companies aren't just making money: by serving these markets, they're helping millions of the world's poorest people escape poverty".

James Mwangi may not be a saint but what he and the founders of Equity Bank have done has brought smiles to millions of Kenyans who are now sought after rather than rejected at bank counters.

Rather than using the privilege of parliament to kill one of the few successful entrepreneurs, we should be using this to nominate him for a Nobel Prize. This is what they have done in Bangladesh where Mohammad Yunus another microfinancing guru has been awarded a Nobel prize.

But even with all these good news, Equity is still a very small bank, even by Kenya standards. Until recently it had an equivalent of less than 1/6th of Barclays Bank (Kenya) Assets, the largest bank in Kenya.

It is interesting that the attack on the bank's CEO is coming at a time when the bank intends to buy into Housing Finance. This will see the bank enter the mortgage market to compete with the big in the industry.

In collaboration with an international business, the bank plans to build an extensive global network that will provide competition to established foreign players in taking part of the cake that is remittances by Kenyans in the Diaspora. This opens the way for the bank to hand foreign exchange and investment business estimated at Sh60 billion.

The bank has also launched a Sh5 billion women's fund and it plans to open women only branches across Kenya. This according to the bank's battered CEO, James Mwangi will help more women access loans and other banking services which they may have found difficult to get in the past.

The bank has also provided scholarships to 94 top performing students and given them an opportunity to work in the bank.

Their CEO was also invited to the G-8 summit for the effort of the bak in enhancing microfinance services in Kenya.

These achievements are likely to sour grapes to our not so enterprise minded politicians. Many of them do not like maendeleo, particularly where they have no control. Equity Bank seems to be rubbing some of them teh wrong way.

Sometime back, the same Ikolomani MP, Bonny Khalwale, who is currently raising questions in parliament about the integrity of the bank's CEO, was accusing Equity for allowing criminals to get bank accounts by not asking for referees when someone opened a bank account with them.

Now Julius Arunga - Khwisero MP backed by Khalwale, are on Equity's case again, but this time accusing the bank's CEO, James Mwangi, for his role in the collapse of Trade Bank in the late 1980's; owning the bank though nominee accounts and share price manipulation through Dyer and Blair Investment Bank.

Khalwale tabled a document written by one S K Patel who claims to be a consultant. In short they want to rubbish the work of James Mwangi at Equity, a model institution that has demystified banking in Kenya by using the privilege of the house to raise allegations with no basis.

Until this indigenous simple model of banking came to be, banking suffered from silent segregation across class lines, a relic of our colonial history.

The timings of these questions in parliament is perhaps to coincide with when the bank is buying Housing Finance and putting into gear other revolutionary services suggests that something is afoot.

The question is, "whose interest are these three (Khalwale, Arunga and Patel) representing. Do the two MPS know who owns all the other banks, which apparently have so many nominee shareholders? Have they vetted the CEOs of other banks?

We are envious people and splashing the banks ownership in the media and showing some rather simple looking people owning shares worth hundreds of millions of shillings may just trigger some of those primitive human sentiments. it is not difficult to give such attitudes a political twist.

Beyond that is the concern that our politicians will not hesitate to ruin an institution to satisfy their sentimental and political ends perhaps also assisted by those who may gain by their collapse.

We profess to run a free market economy. To benefit from it we must have supportive attitudes. So far however a good number of our leaders display a certain negativeness to indigenous institutions that has refused to fail, showing sadly that they are more comfortable with foreigner's success than that of Kenyans. This is unfortunate but true. It comes from age old brain washing which though rarely discussed is still embedded in many peoples psyche.

It is time our MPs learned to like, support and defend local enterprise. After all without a stable administration, it is difficult for any institution to do well. So they should claim part of the credit for the success of the bank.

Equity Bank should go ahead with its ambitious plans. After all, by going public, the bank's owners and managers must have known that it was opening up to public scrutiny, some of it with questionable intentions. That is the price to pay for listing and also operating an institution in a sector that is regulated.

Can someone educate our MPS on the value of local enterprise so they can stop fighting it and start supporting the same. For some of us if there is any concern about Equity Bank, it is how it will raise the capacity to manage such rapid growth which they have done well so far. Business needs support, not attacks from politicians.