1. EQUITY BANK ALTERNATE DELIVERY CHANNELS By Dr. James Mwangi, MD and CEO, Equity Bank Ltd, Kenya. Wednesday, September 19, 2007

2. KENYA DEMOGRAPHICS Location: On the East African Coast astride the equator Total Area: 582,650 sq Km Capital City : Nairobi Currency : Kenya shillings (KES) Population: 34,707,817 Population Density : 60% 38% Informal MFI’s & SACCO’s Banks Un-banked Male 91% Female 90%

3. EQUITY BANK LTD. A Public Listed Company at the Nairobi Stock Exchange. A Leading Micro Finance Banking Africa. Has Leveraged on ICT to offer innovative products & service to increase its outreach. 65 Branches, 44 Village Mobile Bank Units, 200 ATM’s, 100 POS, 560 EFTPOS, e-Banking SMS Banking and m-Banking. Customer Base in Year 2000 - 61,000 now 1.6 million. Home to over 40% of Bank Accounts in Kenya. Ratings and Ratings: 3 rd Best Microfinance Bank in the World by Micro Capital – Sept’2007 April 2007

4. ALTERNATE DELIVERY CHANNELS Due to its large customer base, high volume of transactions and changing consumer needs Equity Bank aims to provide its customers with innovative financial products and growing its range of Alternate Delivery Channels:  200 ATM’s  350 ATM’s  100 POS  1200 POS  300 EFPOS  560  SMS Banking  Mobile Banking  Internet Banking  Retail & Corporate The Bank has initiated setting-up a network of Agents to facilitate provision of financial services via the above channels and targets to recruit over 1,800 agents in the next three years More than 68% of Bank’s cash withdrawals transactions and enquiries are undertaken at ATM’s & EFTPOS  Target 80% Over 9 Million Potential Subscribers } and Link to 3rd Party Networks

5. Agency Model Digital Villages Equity BANK Super Markets Fuel Stations Kiosks Whole Sellers Prominent Retailers Hospitals Schools Agents Government Agencies Provincial Sub-Location Location District Sub-Agents External Payment Networks Other Banks

6. MOBILE PHONE BANKING The Bank has been working on the mobile banking project, which will go a long way in boosting the Banks’ alternate delivery channels other in addition to the traditional banking methods. In Dec 2006 Equity Bank launched the SMS component of it’s Mobile Phone Banking Service named Eazzy 24/7. As At 31 August, 2007 over 60,000 customers had subscribed to the service with over 500,000 transactions processed to date. In September 2007 The bank has launched the second component of the M-banking project. The service facilitates transactions via a USSD menu-driven mobile phone interface and a voice-activated (IVR) phone menu service on a VISA and Mastercard certified platform. The service is currently being piloted in a live environment with over 1,500 members of staff.

7. EAZZY 24/7 SERVICES Customer Notifications/Alerts Customer DR/CR advices Exchange rates Enquiries Account Balance Enquiries Airtime Purchase Cheque book Request Full statements requests Mini Statement Enquiry Stop Cheque Instructions Bulk SMS to Customers Utility bills payment Loan Repayment Notifications Loan Approval Notifications Funds Transfer Person to person payments Person to business payments Business to person payments Stop card instructions BASAMKP1234 MSSAMKP1234 SASAMKP1234V100 CASAMKP1234V100 Reply with the transaction you wish to perform 1 Banking 2 Top up 3 Bill Payments 4 Pay an Eazzy 24/7 Agent 5 PIN Change 6 Stop a Card 7 Request a Card SMS USSD & IVR Reach the un-banked Pay at a Supermarket Challenges: Remembering Message Formats, Acceptability, Recruitment & KYC, Access Charges & Demand for exclusivity by Telcos, Handset Cost, Network Congestion, PIN not Masked, etc Micro-Credit Services Under Consideration on all ABC

8. CLIENT VALUE PROPOSITION Improved security as the customer are able to perform banking transactions at their own privacy and without risk of carrying physical cash. Alternate Channels provide fast, user friendly and convenient means of transacting. Transact anywhere anytime round the clock. Mobile banking offers a medium for performing online transactions at very low costs as overheads are greatly reduced. Real-Time notifications of transactions in your account No need to visit the bank to make enquiries and requests

9. BUSINESS PROPOSITION Convenience and availability will fuel growth in volume of transactions and hence transaction revenues. Efficiency gains: The financial institution is able to handle substantially increased business transactions without corresponding investment in physical infrastructure Increased customer satisfaction thus customer retention and brand awareness and reinforce brand recognition Rapid access to financial services on the back of the mobile infrastructure “banking the un-banked” New partnerships and relationships with other businesses e.g. Telcos and distributors Liquidity management: Less cash in circulation. Minimizes expenses : Cash in Transit and Insurance New revenue streams.

10. ENVIROMENT Security and Privacy issues are far more significant for consumers who depend on Alternate channels to do financial services. For such contingencies, appropriate banking regulations, security,communications and information policies need regular review in order to embrace the emerging ABC products. The field of mobile banking is not only new and fast evolving but also sits at the overlap of two regulatory domains:- Banking and Communications. Depending on the product offering the overlap may raise the risk of coordination failure, where legislation or regulatory approaches are inconsistent or are contradictory. Complex regulatory issues surrounds mobile banking and thus a comprehensive vision for market development between policy makers, regulators and industry players can help to define obstacles and calibrate proportionate risk mitigations at appropriate times.

11. (insert the SMS banking poster) WELCOME TO THE LATEST EQUITY BANK BRANCHES

12. THANK YOU Q&A For More Information Visit : Website: www.equitybank.co.kewww.equitybank.co.ke Email: info@equitybank.co.keinfo@equitybank.co.ke Sam Kamiti GM – Alternate Business Channels Sam.Kamiti@equitybank.co.ke