Equity Group Holdings Plc’s unit in Democratic Republic of Congo is opening as many as 3,000 new accounts a day and management expects to double profit this year.
(Bloomberg) — Equity Group Holdings Plc’s unit in Democratic Republic of Congo is opening as many as 3,000 new accounts a day and management expects to double profit this year.
Accounts at EquityBCDC have climbed to 1.6 million from 1.1 million when it completed its merger with Banque Commerciale du Congoat almost two years ago, helped by using an agency banking model from its Kenyan parent, according to Managing Director Celestin Mukeba.
“We enable supermarkets, pharmacies, traders who are really manipulating cash to become banking agents” to accept withdrawals, deposits and sometimes open accounts, Mukeba said in an interview last week at a US-Africa Leaders summit in Washington. “We have opened 16,000 and the aim is to reach even 50,000 across the country so that it really reduces the cost of doing banking operations.”
Congo is one of the least financially inclusive economies in Africa. There are only about 1,000 physical bank branches in the continent’s second-largest country by landmass, and only 7% of its 100 million people have accounts, Mukeba said.
The group’s expansion means it’s vying with Rawbank Sarl to be the biggest lender in Congo. Both have about $4 billion in assets, according to Mukeba and Rawbank’s website.
“The growth has come from all segments, from corporate, from SME, from retail,” Mukeba said, referring to small and medium-sized businesses. “As of today, we have 100% growth on the profit of last year already.”
EquityBCDC reported $50 million in pretax profit for 2021.
Mining, Farming
Kenya’s Equity Group owns 77% of the unit, with the Congolese government holding 15% and the World Bank’s International Finance Corp. a minor shareholder.
The IFC agreed last week to help build a yield curve in Congo after signing a deal with Equity Group, Mukeba said. The lender will create a capital market with the central bank and is looking to issue commercial paper by the middle of next year, he said.
Last month, Moody’s raised EquityBCDC’s credit rating one step to B3 from Caa1, making it the highest-rated bank in the country.
The lender is targeting small-scale mining and agriculture by offering financial literacy programs to reach unbanked farmers, artisanal miners and entrepreneurs, Mukeba said.
After a $100 million capital increase by shareholders in September, the bank can now loan as much as $85 million to a single business, Mukeba said. “We can do financing syndication of up to $450 million to one company, which gives us room to be able to play a big role in the corporate world.”
Mukeba said in the coming year the bank was looking to continue growing and would consider a deal.
“We can grow organically, which you have seen,” he said. “And we can still continue growing by acquisition. It’s an option.”
–With assistance from Bella Genga.
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