There are various examples of companies doing thriving business in Africa’s rural areas. Through innovative sales, marketing and distribution tactics, they are overcoming common rural challenges such as under-developed infrastructure and low purchasing power. This report examines some of the strategies companies have employed to capture the opportunities in the continent’s hinterlands.

In the mid-1990s, Kenya’s Equity Bank found itself in the unenviable position of being technically insolvent. However over the following two decades, it transformed into a leading financial institution with over 10 million customers, by predominantly targeting the low-income and marginalised mass market. It has also gone beyond the comfort of the cities to provide loans and banking services to those living in rural areas – a segment neglected by many of its competitors.

But attracting and transacting rural customers through brick-and-mortar branches is expensive, given that people are dispersed across wide areas. To overcome this challenge, Equity embraced a model called ‘agency banking’, which comprises partnering with existing retail outlets – usually informal kiosks – to offer selected products and services on behalf of the bank. Kenyans living in remote areas often have to travel long distances to visit a bank branch, but with the agency banking model, Equity brought financial services closer to where people live. Today the group has over 27,000 agents, compared to not more than 180 traditional branches.

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Published:17 July 2017




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