Type: Business
Pages: 9 | Words: 2550
Reading Time: 11 Minutes

This is a financial services organization in East Africa. The group’s headquarters are located in Nairobi, Kenya with subsidiaries in Kenya, Uganda, Rwanda and Southern Sudan. Equity Bank Group is a fast-growing financial services organization in East Africa, with an estimated asset base of over US$1.3 billion, as of March 2009. The bank was named as the “Best Microfinance Bank in Africa” during the annual African Bankers Awards ceremony held in Washington, D.C., USA in October, 2008. Equity Bank was also named the “Best Performing Ai100 Company” during the Africa Investor Awards ceremony held at the New York Stock Exchange in September, 2008.

In June 2008, the bank was voted by Euromoney awards for excellence as the best bank in Kenya in June 2008. In Kenya, Equity Bank emerged the overall best bank in Kenya at the Renaissance Capital Bank awards in August 2008 and was cited locally as the only stock that returned positive shareholder value during the year 2008 at the Nairobi Stock Exchange.


Bankers cheque.

It is available to both Equity Bank customers and non-customers. It attracts a commossion charge of only Kesh 100.

Standing order.

These are instructions given by a customer to debit an account with a certain amount of money periodically and credit another account with this amount.

Remmitance process.

Salaries, pensions and other remittances like agricultural products are processed through Equity Bank at an affordable cost.

Inter-Bank transfers.

The Bank offers an opportunity to make direct payments to other banks through inter-bank settlements and also lend other banks funds through inter-bank activity.

Cash Back services

This is where the Bank’s customers withdraw cash and pay for the goods/ services at the till at their prefered merchant outlets at a very low price using their Equity AutoBranch card or VISA CARD.

Equity Business account.

This is a convenient medium for accumulating deposits, business transactions and for remittances like pensions, salaries and farm poducts. It can be opened in an individual’s name, joint names, registered groups and registered business names.

Corporate e-Banking.

The application provides account level inquiries, statement downloads, funds transfers, services requests, etc thereby providing the user the convinience of carrying out basic as well as advanced banking operations through the internet.

Other services

Safe custody services, bank opinion, Performance Bonds, Bid Bonds.

Bank Guarantees, TelegraphicTransfers(T.T), Electronic Funds Transfers(E.F.T)

Treasury Bills.


Equity bank has a very diversified business area. It has the biggest coverage area in Kenya with the majority number of branches among all the other banks in Kenya.

The bank has opened branches in almost all the Kenya’s neighbouring countries which include Uganda, Sudan and Rwanda. It is hoping to open branches in Burundi which has recently joined the East African community.

Equity bank has a very wide capital base and is listed in Kenya’s Nairobi Stock Exchange and Uganda’s Kampala Securities Exchange. It has a wide range of products to both foreign customers and local customers. It has Swift Codes to link it with the foreign countries where it has correspondindg banks.


Equity bank has recently entered the market in Sudan.

Sudan is the largest African country.

Environmental factors affecting Equity Bank in Sudan.

Any business organisation exists in local, national and interrnational contexts in which it finds its customers and from which it purchases its equipment, raw materials, recruits its staff and draws most of its ideas and knowledge.

The environment is constantly changing and exerting influences of various types on the organisation. Some are beneficial, some detrimental. It is part of the skill of senior management in the organisation to be able to take advantage of the beneficiel factors and counteract the harmful ones. This involves managing the change that is happening.

When discussing these environmental factors or influences they can for convinience be grouped under seven major headings: Legal, Ethical, Political, Economic, Social, Technological and Competition.

Political factors.

The political influences on organisation and in particular on financial enterprises include such issues as the international relations between powers. The relations between countries has an effect on investment and trade.The attitude of different individual countries towards investment by foreign powers also has an effect and can inhibit the growth of multinationals. When banks lend money to countries, there is some assessment of country risk and these factors can be relevant in determining strategy and lending policy.

The policies of the government or local authority may also influence organisations. An example of this is privatisation of otherwise of various political parties. The policies regeneration, in particular areas of high unemployment also have an influence on other organisations in the area.

Other political influences are:

v Government policies to control interest or exchange rate.

v Alignment of rules such as employees’ rights.

v Privatisation- some of the public are now shareholders for the first time.

v The East African Community-for financial organisations this means:

  • An end to protectionfrom competition from countries within the community.
  • The organisation and its customers have extended business oportunities.

For those companies considering global operations, a number of decicions have to be made, e. g. whether to:

  • Export an entire home base operation (or part of it);
  • Merge with or acquire a foreign company;
  • Have some form of joint venture with a foreign financial institution.

If a company decides to operate abroad, then they have to decide whether to operate as a multinational corporation (one central control operating in many countries) or a conglomerate (the operation in that one country is controlled from a base in that country) with less empasis an central control from a home base.

Sudan has not had a stable government for a long time. It is not politically stable. The citizens have little confidence in the local currency. This places a major challenge to Equity Bank because its major business deals with money. There has been no major government intervention in Sudan. The government of Sudan has a close relationship with that of Kenya. The head office of Equity Bank is based in Kenya. This relationship between the two governments has encouraged the Equity bank management to put up a bigger business in Sudan.

Social /Cultural factors

Social factors directly affect the activities of banks. Social factors could be said to include the climate in which the firm has to operate, e. g. the prestige of financial activities in a country, the religious, cultural and racial influences exerted on finance, the changing patterns in population distribution, alterations in customer attitudes and the efficiency of public administration and their supporting services.

The culture of the people of Sudan is very complicated. There is a mixture of races and religious practices in the country. The population in Sudan is not evenly distributed.Much of the population is concentrated in the Southern sudan. Many of them are not educated and so it is very hard to convince them to practise banking. Many prefer to hold their money as notes and coins and not bank slips or cheque books. The people are also not very civilized. Not many women in Sudan are educated and so a small number of them is working. People have large families . This brings about more responsibilities in the country thus majority of the people in Sudan are poor.

Among the many religions in Sudan are the muslim who happen to have some laws which restricred their way of banking. This has posed a major challenge to Equity Bank.

Ethical issues.

This area is closely linked with political factors as the political parties are responsible for introducing legislation. Ethical issues and how a business responds to its customers, shareholders, employees and suppliers is increasingly important.

Failure to act ethically correct way could mean that a business is a risk. The risk involved in unethical action can be  high and not only financial. There is also the loss of reputation, management time and energy (by dealing with crisis insead of keeping strategy on course) and the loss of employee morale, and customer and shareholders trust. Many organizations try to bahave ethically correct manner by publishing ‘codes of behaviour’, designed with the co-operation of staff, to illustrate how employees should behave when faced with an unethical dilemma. It needs commitment by senior management if this attitude is to pervade all the organization and its systems. For example, an employee is expected to follow all security procedures, but is also expected to provide a high level of customer service. Sometimes the employee may neeed to sidestep procedures to provide this.

Technological factors.

There is no doubt that technology has had a major impact on banking in the last two decades. Organisations wishing to remain competitive must invest large sums of money in research, design and development.

Technology has also played a part in altering job design, taking over routine activities and increasing the demand for specialist staff. It reduces the need for multiple levels of management and can aid communication so the head office can keep in touch with its units, even on international basis. Technology can also increase the range of services on offer and productivity, thereby reducing the number of staff needed.

Sudan is still ragging behind in terms of technology. Due to the frequent poltical unrests it has been very hard to make any major progress in terms of technology. For examole, in Sudan a computer is more of a luxury than a necessity. This is proving very challenging to Equity Bank.

Equity Bank is also faced with the challenge of finding qualified personnel in Sudan. It has to import human resource from its parent country.

Economic Factors

These include influences on the organization such as the current state of business’s markets (is it a boom period for lending or invesment?), the availability of foreign exchange, the purcahsing power of the population and the state of trade in the world. The recent economic instability in the world has affected everyone Sudan included. To add to this, the people of Sudan are not good investors. This has affected the economy of the country negatively. Sudan as a country is not very developed. Though it is the largest country in Africa much of its land is covered by deserts and semi-deserts making it unproductive. Economic changes in Sudan have seen the slow development in the banking industry in the country. Differences in the distribution of wealth between the rich and the poor in the country also has a negative effect in the economy of the country.


Sudan banks face increased competition from a number of sources. As a result of the economic, technological and political climate, foreign banks have set up in business here and building societies and retail organisations have extended the range of financial services they offer. Banks have taken action to maintain their position in what is now a highly competitive market. There are three main competitors facing operating in the financial services industry.

  • Those existing players who provide similar services and can launch, in response to a new product, an imitation just days later.
  • Niche players who provide a restricted range of services and can act as a strong competitors in those specialist areas.
  • Non-financial companies who have diversified and offer restricted financial services, unit trusts, personal loans, credit cards, etc.

Equity bank has responded by:

  • Extending into international market, particularly Uganada and Rwanda.
  • Offering a wider range of investmen services
  • Developing mortgage lending business
  • Developing accountancy services
  • Developing insurance services
  • Developing a special services network for ‘wholesale’ banking customers separate to retail banking.
  • Marketing and providing services geared to different customer needs: pensioners, women, students, etc.
  • Using more sophisticated customer information services.
  • Making premises more user-friendly.

The amount of competition has also led to stringent efforts to control costs , thereby trying to maximise profitability and competitive pricing. It has also led to changes in structure, for example the retail/corporate split, the geographic or relationship/transaction split.

Legal factors

Examples of legal influences on organisations include acts which regulate their activities, e. g. the Employment Acts, which dictate conditions of work for employees,  the Financial Services Act, the Companies Act, and the Banking Act. Financial services organisations are also affected by consumer legislation and rating agencies, who ascribe an index to a bank which reflects its business portfolio. This can have a dramatic effect on business consumer groups and how they regard  the organisation.

Sudan’s law also has these restrictions but unfortunately due to lack of an active government, many of them are not followed to the letter.


It is possible to use the LEPEST & Co model ( legal, ethical, political, economic, social, technological and competitive influences) to examine the reaction of the organisation to its internal environment. In the same way as management must take advantage of the beneficial factors and counteract the harmful ones from the external environment, so management must also actively influence and direct the effect of internal facors.

Legal factors

The internal written systems (head office instructions) are a type of legislation that employees have to follow. There are also unwritten rules of behaviour, conduct and procedure. For instance, how employees should dress. It is these types of rules that create the atmosphere of the organisation.

Ethical factors

These incude employers’ dealings with employees and code of conduct and internal employee policies.

Political factors.

The internal political influences on organisations include such issues as the power, status and position of departments and individuals.

You need to be aware of the politics of the organisation to get things done. Approach those people with power to act. A complaint by a customer addressed to the right person will get a much quicker response than one sent to the wrong individual, who then has to redirect it.

Economic factors

These factors include how resources are allocated and which department or sections receive priority. They also include internal economic affairs like appraisal systems and performance-related pay.  Other economic aspecs are the costs of expansion, the savings associated with contraction, or the economies of restructuring the organisation.

Social factors

These include the attitudes of employees and how they are changing.That is, whether lifelong loyalty to one employer is still perceived as the expectation. There is now more mid-career asssessment and changing employment trends with mid-recruitment.


The internal factors include such things as the new technological processes, the management of change they involve and the increasing use of technology as a substitution for human resources.


The internal competitive influences include competition for resources between people and departmens to get things done and competition between individuals in establishing career paths.


Business in Sudan is not very attractive. The economy is not well developed. The infrastructure is also under developed. Acompany wishing to invet there spends a lot of finances trying to improve the infrastructure. For a young company which is not yet stable it would be very challenging to invest in Sudan. The political unrest also posses a major risk to any business.

Even as Sudan is a politically and economically challenged country, a part of it is more developed. This is the Southern Sudan.

Equity Bank has a wide capital base and its parent company in Kenya is doing very well. There would be no harm in it investing more in Southern Sudan.  This will help the country to develop and also assist the citizens to develop a culture of saving and thereby being able to invest thus boosting the economic development of the country.

Business in a foreifgn country can be very challenging especially when there are strict rules and restrictions placed on foreign companies by the country’s government. A company has to do thorough research to find out the kind of laws observed in that foreign country before entering its market.

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