Following troubles being faced by the financial institution in Kenya, will Equity Bank branches in Tanzania survive the turmoil or close shop and bow out of the country?
Kenyan financial regulators have announced an urgent investigation into serious allegations targeting Equity Bank, one of the largest financial institutions in East Africa.
That was after receiving dozens of complaints from customers reporting missing funds and unauthorized loans issued in their names.
The escalating scandal threatens to undermine public trust in the banking sector.
Preliminary investigations reveal the embezzlement of approximately USD 12 million (1.5 billion Kenyan shillings) from internal accounts through an organized fraud network involving bank employees and external lawyers.
In a separate case, Kenyan police arrested 19 suspects in connection with electronic fraud, involving the theft of over USD 2.1 million from bank customers through counterfeit cards.
Complaints surged after a customer named Lydia Mathia publicly shared documents proving that a fraudulent loan of 34,000 Kenyan shillings had been issued in her elderly father’s name, with the amount deducted despite an official police report.
The bank issued a brief statement affirming its “full cooperation with regulators” and promised to “compensate affected customers,” without providing details on the investigation process.
Informed sources revealed that 200 employees were dismissed in recent months due to “financial misconduct,” a move observers see as an attempt to contain the crisis.
The Kenyan Consumer Protection Union called for a “parliamentary inquiry committee,” warning of a “collapse in trust in the banking system.”
The revelations come at a critical time for the bank, a leader in digital banking services in East Africa, with experts warning of declining confidence among foreign investors in Kenya’s financial sector.
There is Possible legal repercussions, including heavy fines or license revocation and the likelihood of expanded investigations to include other banks amid rising cybercrime rates.
Kenya has seen a surge in digital financial crimes as mobile banking adoption grows, with authorities reporting a 43 percent increase in electronic fraud cases last year alone, raising major concerns about the effectiveness of current security measures.
The case requires close monitoring, particularly as pressure mounts on the Kenyan government to intervene directly.
But even before the fraud scandal, Equity Bank had already started to close down several branches to cut down the overhead, with seven such outlets shutting off in Kenya.