Dear banks, we’re not thieves; we’re your customers!

By MUNGAI KIHANYA

The Sunday Nation

Nairobi,

11 March 2018

The story is told of the saleslady who was employed and promised 15% commission on the deals she closed each month. Her basic pay was a Sh20,000 and for several months she brought in sales worth about Sh250,000 each month.

Then one of her clients placed an order of goods worth Sh10 million. The deal was bigger than the turnover of the whole company for the previous financial year!

When the saleslady went for her commission cheque, she got a rude shock: it was only Sh100,000 instead of the expected Sh1.5 million (15% of Sh10M). The employer said that Sh1.5 million is “too much”!

Obviously, that story didn’t end well but I remembered it after a discussion I had with a reader about biro pens in banking halls. I find it annoying and even insulting, that banks feel the need to chain the pens to the counters to prevent customers from taking them away. The reader challenged me to estimate how much it would cost a bank if the chains were removed.

Take Equity Bank as an example; it has about 9 million customers. Of these, some have personal accounts and others business ones. The majority of personal account holders visit the banking hall about two or three times in a year. On average, the business account holders visit about two or three times per week – some go every day while others go once a week.

Unfortunately, the distribution of these categories is not publicly available but I suspect business accounts are about a quarter of the total. Thus, the there are probably about 2 million business customers and 7 million personal ones.

The 7 million personal account customers make a total of 21 million visits each year. At three time per week, the business customers visit the bank about 3 x 50 x 2 million = 300 million times.

Therefore, there are about 320 million customer visits each year. Now the next step of this estimation is a bit tricky: if the pens were not chained, how many customers would take them away?

Considering that customers are not being encouraged to take the pens away, I think the proportion is less than 5%. However. the only way to know for certain is to try it out and see!

Nevertheless, my estimate is that Equity Bank would need to provide about 15 million pens per year. At Sh10 each, the total cost comes to about Sh150 million.

Now; that might be a lot of money to you and me but what about to Equity bank? According to its 2016 audited financial report, the bank spent about Sh9.64 billion in “other operating expenses”. This figure does NOT include the major expenses like staff salaries and equipment costs. The Sh9.64B is for “sundry items” that are too small to itemise.

Thus, if this bank was to stop chaining the pens in it’s banking hall, its sundry costs would increment by a paltry 1.5%. This is an insignificant increase on an insignificant cost!