Looking for the best banks for small businesses in Kenya? Running a small business or startup in Kenya is not easy. Getting a bank that is friendly to small businesses takes a lot of trial and error. We have experienced the struggles of choosing a bank for small businesses more than once, and we know you have faced the same problem too.
As Wavu Business, we believe that the best banks for small businesses in Kenya should give entrepreneurs a one-stop shop for all their small and medium enterprise (SME) banking needs with low-fee or free business current accounts. Some banks in Kenya may also offer merchant services, business loans, credit cards, and savings.
In this post, Wavu Business compares Kenyan banks to identify the best banks for small businesses. Before writing this article, our main question was, are banks optimized to serve the small businesses in Kenya?
For many decades, the question of the best banks for small businesses in Kenya has not been answered. We answer this question without favour or prejudice by considering important metrics. We support our reviews of business banks in Kenya from expert research and social media surveys.
Below you will find details on our selected Kenyan small business banks based on the following criteria:
- Customer Service and small business support (training)
- Loan facilities, including interest
- Ease of access to funds
- Customer complaints
- Location (number of branches)
- Digital Access
- Fees (on a current business account and on a debit card)
- Internationalization (How can you use it for cross-border payments?)
QUICK POLL Best Bank for Small Businesses
Disclaimer: Due to the comprehensive nature of this article series, we have broken it down into different parts. This is part 1 look out for part 2
Equity Bank
Equity Bank Kenya continues to improve its already strong infrastructure that allows small businesses to transact cash and mobile money deposits. Equity bank offers a current small business account. According to information on Equity Bank’s website, the bank operates in South Sudan, DRC, Rwanda, Tanzania, Uganda and Kenya.
All the information we have used in this article was sourced from online sources. We believe that a bank that supports small businesses should be digital enough to meet the needs of small businesses.
First, we looked at Equity Bank’s website and below is a screenshot of the bank’s current account offering for small businesses:
Equity Bank offers one type of current account for small businesses. But let’s dig deeper, let’s look at several factors:
Customer Service and Small Business Bank Support (Training)
Equity Bank supports its customers through a mobile hotline: +254 763 063 000. We tested this number and found that it is accessible at any time. However, it took more than 10 minutes for the customer service agents at Equity Bank to pick up the phone. With a bank the size of Equity Bank, we did not find evidence of 24/7 dedicated support for small businesses. Equity Bank also offered customer support for small businesses through Twitter. However, it took between 9-24 hours to get a response. We established that Equity Bank offered occasional small business support and training through seminars. The bank does not have dedicated small business support or training for small businesses.
WavuBusiness Ticker: A bank that serves millions of small businesses (informal and formal), having dedicated 24/7 support for the small business customer should not be optional. A small business-focused bank also provides training to SMEs virtually or through physical workshops. Equity Bank can do more by improving customer service in these two areas or partnering with appropriate partners.
Loan Facilities
Equity Bank loan facility for small businesses is offered on a business-to-business basis.
The bank offers several loan options for small businesses, and they include:
Mortgage Finance (Secured):
Mortgage Finance is a loan offered to buy an apartment or a real estate property. If you are a small business owner, you may want to buy a home for your family or invest in real estate. Information on the company’s website, Equity Bank offers mortgage finance for commercial property purchases and residential property purchases. If you decide to buy a residential property, you have 20 years maximum to repay the loan, but if you decide to buy a commercial property, you have 10 years maximum to repay the mortgage.
Development Loans (Tailored to Small Businesses: Secured):
Equity bank clarifies that this loan offer is for helping small businesses expand their businesses. For you to access the development loan or small business loan from Equity Bank, you must be an active account holder for more than six months and have other sources of income apart from your business. This requirement by the bank for small businesses to show other sources of income and have an account with them for 6 months is restrictive and does not favour small business growth.
Trade Finance Loans (Secured):
Trade Finance loans are loans given to support local or international trade. Equity Bank’s trade finance loans are best suited for small businesses that operate in the import and export market. For instance, if you are a small business exporting cars, you can get a loan using your car’s logbook. In the Trade finance loans for small businesses, Equity Bank offers bank guarantees, LPO Financing, invoice discounting, import and export collection, letters of Credit, pre-shipment financing, and post-import financing. A look at the trade finance offering reveals that the bank does not have finance for small business exporters who often struggle when delayed payments.
Eazzy Loan for Business (Tailored to Small Businesses: Unsecured):
The Eazzy Loan for small businesses is a branded quick loan for small businesses in Kenya. The Eazzy loan allows small business owners and entrepreneurs to get a quick loan without needing guarantors and filling out forms. The Eazzy loan amount ranges from Ksh. 1000 to Ksh. 3,000,000. The loan can be accessed for one-month repayment or multiple months. For you to get the loan, you must have an active Equity Bank current account for business. We did research on small business owners and found that you have to use the bank for six months to be eligible for the loan.
Equity Gold Credit Card (Unsecured):
 A credit card for small businesses helps entrepreneurs and single entities to purchase products on credit or without money in their banks. A look at the bank’s website does not reveal much about this product. A bank that favors small businesses should extend credit to small businesses at 0 fees or low-interest rates.
Equity Classic Credit Card (Unsecured):
The equity classic card is a smaller version of the gold credit card. The classic card has less credit limit while the gold card has the highest credit limit. Information on the classic and gold credit cards is not available on the bank’s website.
Equity Asset Loan for SMEs (Secured):
The asset loan for small businesses is a loan that small businesses can take and secure with their company’s assets. For instance, you can take an asset loan and fund your small business if you have a company vehicle.
Construction Loan:
The construction loan for small businesses offered at Equity Bank allows small businesses to get funding to build commercial or residential property. The construction loan has the same terms as the mortgage finance loans.
According to the Bank’s public information, loans for small businesses in the categories above have an interest rate of between 11 % and 13 % per year.
Ease of Access to Funds
How easy is it to access a small business loan from Equity Bank? Apart from the Eazzy Equity loan, which does not require the entrepreneur or small business owner to fill out forms, all other small business loans are not easy to access. The need to fill out endless paperwork to access funds means it is not easy to access them. Banks that care about small businesses should be paperless and more digitally focused.
Small Business Banks Complaints
We searched for small business owners’ customer complaints about equity banks on social media platforms. We found that most of the complaints were about the security of the funds and customer services.
Network
Equity Bank Kenya division has over 179 branches country-wide. This makes Equity Bank accessible from different locations. Small business owners in different counties of Kenya can visit their nearest branch for assistance. The wide network of Equity Bank make is easy for small businesses to access their services.
Digital Access
Digital access is the new way of delivering financial services to small businesses. Digital access should be a priority and not an option. Equity Bank has kept this promise and introduced its financial services through digital tools such as the mobile banking offered through Equitel, internet banking and the EazzyBiz tool that allows the bank to offer cash and liquidity management for small businesses.
Fees (on a current business account and on a debit card)
Equity Bank says their current small business accounts do not have maintenance fees. This makes it very convenient for small businesses. The bank also does not have ledge fees on cash and cheque deposits. However, a small business that wants to use the equity bank’s cheque must pay Ksh. 17.50 per sheet (leaf). If you send your business’s money through Swift or other apps to an Equity Bank account, you will be charged a fee from the third party. Small businesses are also charged for getting their printed statement but may subscribe to the free email statements. If you want to get an ATM card, you will pay Ksh. 600 excluding taxes.
Internationalization (Can you use Equity Bank for cross-border payments?)
The best bank for small businesses in Kenya should allow SMEs to operate beyond the border. Their current accounts should support different currencies and integrate with other solutions. Of the different small business banks we have used, equity bank has done a good job of internationalization. The bank has also partnered with PayPal to help small online businesses such as writers, freelancers, and entrepreneurs collect their funds from other places. If you are using Equity bank to withdraw money from your PayPal, you will receive the funds in 24 hours and get a charge of 1 %.
Frequently Asked Questions About Equity Bank?
Equity Bank is a Kenyan bank with headquarters in Nairobi Kenya
To open a Paypal withdrawal service with Equity Bank, you need to contact them directly to get directions.
Yes. Equity Bank has several mobile apps. You can access the equity bank mobile app from here: https://play.google.com/store/apps/details?id=ke.co.equitygroup.equitymobile&pli=1
This is the end of part one of the best banks for Small Businesses in Kenya. Stay put for part 2. Share your reviews about the different banks and small businesses on our platform.
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