Wednesday, August 02, 2006

Equity Bank's business model: An inovation or a risk

Some of the more controversial business models of equity bank:
Clearing cheques:
If you a deposit a cheque today, it takes four working days before it clears for you to access the cash. At Equity, you can deposit a cheque today, and collect the cash but pay 3% of the amount as fees.

You can take an overdraft on your account, you pay flat fee of 5%. It doesnt matter if its for a month or 2 days. Eg. On 100k you pay 5000 for a day or for a month.

Approval of loans, cheques clearance and overdrafts
In other banks, there are clear and rigid requirements to get a loan. viz proof of employment, 6 months bank statements etc. At Equity no need. Just present yourself to the bank manager and he looks at your account and tells you if you qualify, the amount possible for lending and the terms.

Decision on Interest rates chargable
On most banks, the rates are fixed at the head office for each category of clients. At Equity, its decided per loanee by the bank manager!!

Kenyan Blogs