Kenyan banks have recorded huge profits in the first half of the year, with mobile phone products emerging as one of the driving forces behind the surge.

Kenya Commercial Bank (KCB), Equity Bank, Family Bank and Barclays Bank are some of the financial institutions that have announced their half-year results.

The results showed remarkable growth in digital banking products that have become a game-changer.

Listed lender KCB recorded a profit of 12.8 billion shillings (125 million U.S. dollars) in the first six months of the year, according to its financial results released on Aug. 15.

The bank’s chief executive, Joshua Oigara, noted that 87 percent of the KCB’s transactions were conducted away from the branches, through mobile platforms or agents.

Mobile lending at Equity Bank, whose half-year profit stood at 116 million dollars, rose 41 percent, with 97 percent of the transactions conducted through mobile platforms and agents.

Equity Bank chief executive James Mwangi said the bank issues 15,000 digital loans a day.

“The digital platforms have helped to remove human bias where some people gave loans to relatives and friends,” he said. “Now everything is digitized.”

Family Bank, which recorded a 5.1 million dollar profit, also said its strong performance was mainly driven by digital banking.

“We are on an upward growth trajectory thanks to increased lending especially on our digital platform,” Family Bank chairman Wilfred Kiboro said.

Analysts noted that Kenyan banks have greatly leveraged on mobile platforms to grow their businesses despite the introduction of interest caps in 2016.

“Banks were latecomers when it comes to mobile lending because independent lenders had seen a gap in the industry and grabbed it. But the financial institutions have since been able to defend and protect their market,” said Ernest Manuyo, a business management lecturer at Pioneer Institute in Nairobi.

He noted that through mobile apps, banks are now lending twice as much as they used to.

“The number of customers has also increased significantly thanks to the convenience of the platform,” Manuyo said.

With increased adoption of smartphones and mobile money use in Kenya, mobile lending products can only rise, with the service set to hugely shape the future of the industry, he said. Enditem

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