Reported by The Africa Report
Equity Group is restructuring to spin off its technology and data divisions into an independent entity by late 2026, aiming to decouple its high-growth fintech operations from its core banking business.
Equity Group, Kenya’s second-largest lender by assets, is in the advanced stages of spinning off its technology subsidiary into an independent company to unlock more value from the increasing use of artificial intelligence (AI), data-driven services, cross-border transactions and digital payments, according to three people familiar with the matter.
The proposed restructuring will consolidate the bank’s mobile-money, telecom operations, e-commerce platforms, information technology services and data enterprise into a single entity under a new corporate name, the sources told The Africa Report, requesting not to be quoted as the information is not yet public.
After years of heavy diversification, the move forms part of a pruning strategy to allow the bank to focus more on core banking, underwriting and wealth management while giving the technology business room to expand independently.
Extending reach
The separation awaits board and regulatory approvals across key African markets, with implementation expected to begin in the second half of 2026.
Sarah Kabira, an independent director at Finserve Africa Limited – Equity’s telecommunications subsidiary operating as Equitel – will lead the new entity once established.
We came from the ledger and the cards. We are now going through another major transformation where the future will be technology-led
Equity’s banking subsidiaries in Kenya, Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo (DRC) will serve as anchor markets for the technology company.
However, tapping into the growing cross-border payments and remittance services, the company could extend its reach into strategic corridors such as Nigeria, Southern Africa and the United Arab Emirates (UAE), where the lender recently opened a representative office.
The Nairobi Securities Exchange-listed bank plans to finance the new venture internally during its transition and early growth phases.
Group CEO James Mwangi said the lender has a “strong balance sheet of KSh16bn ($123.7m)” to fund innovation and product development.
“The future of [the] financial service sector is different from the brick and mortar infrastructure. We came from the ledger and the cards. We are now going through another major transformation where the future will be technology-led,” Mwangi said during the Inclusive Fintech Forum (IFF) in Rwanda, where the Group is planning to establish an AI studio.
Equity’s diversified non-banking businesses – spanning health, insurance, telecommunications, fintech and data – have historically struggled to generate significant earnings.
In 2024, those operations contributed 3.2% of total profit, equivalent to about KSh1.1bn, while delivering a return on average equity (RoAE) of 42.4%.
The technology unit disbursed KSh133 bn ($1.03bn) by September 2025, generating KSh8.1 bn ($62.7m) in revenue.
Turning technology into revenue-generating business
Across Africa, traditional lenders are rapidly repositioning technology divisions from back-office support units into revenue-generating businesses as they confront the surge of fintech firms and mobile money platforms.
Africa’s fintech sector has attracted more than $6bn in venture funding since 2020, with over 1,200 active startups operating across payments, lending, remittances and digital banking, according to industry estimates.
The restructuring comes as Africa’s fintech ecosystem – which has attracted more than $6bn in venture funding since 2020 and has over 1,200 active startups – reshapes the continent’s payments, lending, remittances, and digital banking.
Mobile money alone processed more than $800bn in transactions across Africa in 2023, according to GSMA, the main global association representing the mobile telecom industry.
Banks are consequently responding by acquiring or investing in fintechs.
South Africa’s FirstRand, for instance, acquired a 20% stake in UAE-based Optasia, Nigeria’s BAS Group took Zuvy, while Kenya’s KCB Group has, within a year, fully acquired fintech Riverbank Solutions and bought a minority stake in payments company Pesapal.
Equity Group, however, is pursuing a different path – building a standalone technology company from within rather than relying on acquisitions to remain competitive.
Investing in digital finance
The objective remains the same: compete with fintech startups while leveraging the bank’s scale, customer base and regulatory advantage.
“What is essential is the underlying infrastructure that powers mobile apps. When we look [at] it from Equity Group, we see investment in digital finance as the core infrastructure. It will no longer be the physical passports or IDs. The process will be validated digitally without the need for physical branches.”
Some lenders, including Standard Bank Group, have gone further by creating venture investment arms dedicated to fintech startups to bring emerging technology into the bank faster than internal development alone would allow.
The shift is partly defensive. Telecom operators such as Safaricom – whose mobile money service M‑Pesa processes more than $450bn in transactions annually – have captured tens of millions of users across East Africa.
At the same time, digital lenders and payments startups are steadily eroding banks’ traditional fee income.
Telecom giants, including MTN Group and Airtel Africa, are also spinning off their mobile money businesses amid tightening regulation and intensifying fintech competition.
Industry executives say the next battleground will be embedded finance – where banking services are integrated directly into e-commerce platforms, telecom apps and digital marketplaces.