Standard Chartered expands its mobile-money lending platform to capture young talent

KENYA – Standard Chartered, multinational banking and financial services company, will offer small loans via mobile phones as part of a broader effort to capture younger African clients.

“Traditionally our customers have been an average age of 50-plus, so the plan is to attract younger customers by offering all our banking services on phones,” Sunil Kaushal, the CEO of the lender’s Africa and Middle East business, said in Johannesburg.

“We are planning to use telecom data to determine the credit profile of customers for our smaller-ticket lending product.”

The London-based lender is entering a crowded space. With a few clicks, subscribers in East Africa’s largest economy can seek loans of up to $400 from more than 50 providers, pushing many into a debt trap. 

Even so, mobile-money transactions on the continent account for almost half of the world total, making the region fertile ground for growth. From Kenya, Standard Chartered will roll it out into other markets.

Standard Chartered already gives customers in Kenya access to investment and insurance products via its mobile-phone application and has a partnership with Sanlam, Africa’s largest insurer, to access other markets on the continent, Kaushal said. It plans to expand the offerings to Nigeria “soon”, he said.

With operations in 16 African markets and a history on the continent stretching back 160 years, Standard Chartered is trying to tap a population of 1.25-billion people, 60% of which are under the age of 25, according to estimates by the Brookings Institution.

But poverty and a lack of infrastructure means digital offerings that push large volumes are the most effective way to target customers who make smaller purchases, said Kaushal.

“Look at the food and drink sector — in many markets the product offering starts with a sachet, because that is the customer’s purchasing power,” he said.

“You need to build a product where even if you lose out on the ticket size per customer, you make up in the number of products sold. This is where digital comes into play. Get small-ticket customers today, that becomes a larger-ticket customer in the future.”

The bank is further investing in digital upgrades for its custody business, including using blockchain technology to settle trades.

“We are able to add three times the amount of retail customers through digital than we had before,” Kaushal said. “That’s not enough, we also want our other traditional customers to start using our digital offerings.”

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