Category Archives: Eritrea

The Equity Story

Equity founder, Peter Munga, worked for the Ministry of Agriculture. He would go to work then come back home after a while, the same way most of us visit upcountry. His mother, among other villagers of Kangema worked in the tea farms.

They would get paid in cheques. There was no means to cash the cheques in the village. So they would wait for Munga to come visit home and give him the cheques. He would then go to cash them and bring the tea farmers their money the next time he visited home. This went on for a while until he felt the need to help his community.

Back then, to own a bank account had strict regulations. One had to have several referees to open an account, maintain a minimum balance of Kshs 10,000 and on top of that were storing bank charges. Withdrawal from an account took 7 days. Therefore most people preferred to store their hard-earned money at home, under their mattresses, where it was easily accessible.

Equity has had a few phases. The first one being 1984 – 1993. This is when Munga begun pursuing this dream to help his people. Within this period, the company made losses. But since his goal was more than just profit-making, he carried on.

The second phase which begun in 1994 had James Mwangi, the current Group CEO and MD, come in. Between 1994 – 2003, the company improved its business model and even begun mobile banking. That is going to people’s homes to offer banking services and financial education. It’s in this phase that they begun computerizing their operations.

The art gallery at the #equityat35 party had Equity staff explain to the guests the Equity history wonderfully.

The third phase (2004-2013), which they refer to as take off, had them become listed on the NSE (Nairobi Stock Exchange) and USE (Uganda Stock Exchange). In this phase, they incorporated mobile banking (phone banking) and were the first bank to introduce agency banking. They went on to win awards among them being The Best Bank in Kenya, The African Business of the Year and The Global Vision Award in Microfinance. 

Today, Equity is also listed on the RSE (Rwanda Stock Exchange). The bank owns branches in 9 African countries; Kenya, Uganda, Tanzania, Rwanda, South Sudan, DRC, Ethiopia, Zambia and Mozambique. Their goal is to become a Pan-African Bank with 10 countries under their sleeve by end of the year. In the beginning, their main competition was mattresses and banks, but today, their main competition is cash, fintech and telcos. 

They are big on community social responsibility (CSR), hence the Equity Group Foundation. This has been evident through their Wings to Fly program which has over 16,000 beneficiaries. Equity runs FIKA (Financial Knowledge for Africa), which is a free program that equips the beneficiaries with financial management skills. The Foundation finances the Equity Afia Clinics which are run by the Wings to Fly graduates. The clinic currently has branches in Ongata Rongai, Buruburu, Kawangware, Kayole, Thika, Ruiru, Nyeri and Nakuru. 

A guest post by @themkare 

Possible Economic Bubble In Ethiopia?

A guest post by @Kahenya

Ethiopia has a very positive economic outlook and yes, it has a lot of development going on, but is this sustainable, now that the linchpin (Meles Zenawi) is gone? The one thing that is universal about the entire continent is that the poverty line seems to grow every year, sometimes it shrinks, but only for a moment. The cliché remains, that the rich are getting richer and the poor are getting poorer and there is no true middle class –  and if there is, it’s only based on people who don’t want to imagine that they are less than middle-class.
Africa is the kingdom of billion {insert any local currency here} projects. Ethiopia also finds itself in the same quagmire, except for one thing. They are actually making it work for their benefit. In Ethiopia, construction and infrastructure development are at an all-time high. It was necessary for this to happen until Meles Zenawi and his beloved Ethiopian People’s Revolutionary Democratic Front (EPRDF) went their separate ways, much to the disadvantage of EPRDF. Zenawi’s rule transited between dictatorship and benevolence and it was working for him and Ethiopia. Love him or hate him, from being out in the rebel trenches to donning a suit, Meles was every bit a tactical genius. He grew Ethiopia from a war-torn country to one of Africa’s fastest-growing economies. Only Meles could conjure up infinite possibilities – sometimes by sheer cunning and sometimes by sheer fear.
Hotel cautions on using skype
EPRDF needed Meles to live long enough to get to his end game which would have allowed EPRDF to focus on less ambitious but more people-driven development. That did not happen. With him gone, and an open democracy on the horizon (since every linchpin’s death or retirement is followed by internal crisis and eventual dissolution, with less political tolerance by the citizens), with a lot of projects still incomplete, and with Ethiopia still facing many financial challenges, the positive economic outlook has quickly shifted from “going to happen” to “may happen”.
EPRDF has moved from the strong offensive to a sullen offensive-defensive. Push-Pull. Addis, like Luanda, Angola, defies Economic Science. If you buy a vehicle in Ethiopia, when you sell it, even years later, the value generally appreciates. Rents and property rates are astronomically high, coming close to rivaling Luanda – a huge developmental Achilles heel.
Lunch at the  Sheraton in Addis
The key driver of such high rates is the presence of diplomats and NGOs who have an unending well of money – and this is where the very living ghost of Isaias Afewerki (President of neighbouring Eritrea) comes to haunt Ethiopia. Eritrea, despite being poor, is not dependent on Foreign Aid or NGOs. They have that to pride. For Eritrea, there are no illusions. Poor is poor so the only way is to go upwards – on their own. Ethiopia lacks that. Instead, they have to endure a very faint cushion, one that is rarely successful except in dire times. Unless Ethiopia starts equal distribution of development in the small business sector and begins to really crack the whip on poverty alleviation and shakes off its dependency on NGOs, EPRDF could find itself in a lot of trouble – just like the ANC is, despite them trying to conjure all sorts of ghosts, from Jacob Zuma’s incarnation of Umshini Wami to the very living ghost of Nelson Mandela. Nonetheless, Ethiopia’s economy is about to get a very shocking reality check.

Guide to Asmara

A guest post on a visit to Asmara, the capital of Eritrea, which turns 20 today. [See Wikipedia Eritrea]

Getting There: From Nairobi, NAS Air flies direct once a week to Asmara. There are alternative but longer routes such as Kenya Airways via Khartoum (connecting with Sudan Air) or through Egypt. NAS Air flies in on Saturday morning and returns in the afternoon, with a round-trip ticket costing ~$700. Also, a visa is required of Kenyans prior to travel.

Upon arrival in Eritrea, officials will record details of items in your possession such as computers, phones & electronic devices in a declaration form, which will be cross-checked when you fly out.

Money: The local currency is called the Nakfa, which exchanges at about 15 to the US dollar. Though it is illegal for Eritreans to possess forex, there is a black market where the dollar exchanges for about 40 Nakfa.

Getting Around: Asmara is a small town and people walk around or take bicycles or buses. They also use horse-drawn carriage for goods. For visitors, taxis are available and are clearly painted in yellow.

It is possible to get around speaking English (which is better understood than in Ethiopia). This is because, while the local languages (e.g. Tigrinya, Tigre) are taught in elementary school years, they switch to English for the latter years. Other languages spoken are Arabic and Italian.

It is ok to walk around, and while there are no armed police but the army is visible.

For communications, hotels have phones and the internet, and there are many cybercafés, though it appears Facebook is blocked. You can also hire a prepaid phone/SIM that costs ~ 1500 Nakfa per week.

Food & Bars: Restaurants have good plentiful meals that are based on Italian cuisine – Spaghetti, pasta, lasagna etc. Meals may be so large, that you may end up eating only once a day, and these cost 200 – 400 Nakfa.

They drink lots of carbonated water or Cola. There are local beers, wines, and spirits like Asmara cognac (125 Nakfa) and Asmara champagne (180). Coffee is common, though their pot differs from the Ethiopian one in that it has no spout. It is sold in 7 different flavours, depending on the number of times it is brewed, and the seventh flavour (brewed 7X) is the lightest /weakest blend.

They smoke a lot in bars and restaurants, so you may prefer to sit on the outside. There is a great love for football in the country. Kids kick balls in the streets, and English premier league matches are shown. There is a strong affinity for the Arsenal football team because of the high number of African players [regardless that some of them are French] compared to Manchester United, [considered racist for the opposite reason]

Business & Infrastructure: It is an agricultural economy and they have three planting seasons, cultivating hardy crops like barley and millet, as water scarcity is a big issue in the country. The Government and the UN have built lots of water tanks for harvesting rainwater.

  • A Canadian company is mining gold which was recently discovered.
  • -Roads are broad, but with low traffic levels.
  • All land is owned by the state, lease it to improve and no foreigners are allowed to own any.
  • They hold Eritreans in the Diaspora in high regard and celebrate their arrival back in the country.
  •  Potential investment opportunities are in leather and wool.

Sight-seeing: Asmara, which is hilly and cool, is popular with Sudanese (North) as it is not as hot as Khartoum. Sightseeing is on the Eastern escarpment, which has some rocky terrain. Also, there is a steam train, and buses/taxi’s to the Red Sea, port of Massawa.

Weddings are done over a weekend; On Saturday, they dress in traditional outfits and attend the church ceremony, then on Sunday, they dress in western clothes for the reception portions, which are often held at hotels.

Oddities: The big-brother factor in the country; you can’t take pictures or stand near government buildings, [but you don’t know what is a government building?]. Also, you are warned not to talk politics or talk idly to waiters, taxi drivers etc., as they will report to the government!

  • There is a distrust of the outside world and hate for Ethiopia, largely as a result of the war fought for independence during which they feel the Ethiopian side committed acts that destroyed family life for a generation. [It is not unusual to find older couples who married recently or couples in their sixties with very young children]
  • Also, other plane passengers ask you to help carry the load on the aircraft, but decline this…

The above picture and many more, are from this site about Asmara.

EDIT February 2023.