Members inject Sh1.5 billion for 25 per cent stake in women bank

About 61,000 members of Kenya Women Holding now own 25 per cent of the Kenya Women Microfinance Bank (KWFT).

The members purchased the stake at Sh1.5 billion through a special purpose vehicle. The stake was sold off by Kenya Women Holding (KWH), which established the microfinance institution as its subsidiary in 2008. KWH is a non-profit that oversees KWFT’s product development and corporate social activities.

The new shareholders will receive dividends declared on their shares for 2014, and are expected to enhance the value of their stock by trading with each other through the Over the Counter (OTC) facility.

“We made a promise to our members that if they supported the growth of the institution by repaying their loans fully, growing their business through innovation and learning, KWFT would one day be theirs. They supported us and I am glad that we have delivered on the promise,” said KWH Group CEO Jennifer Riria.

She noted that this arrangement has gone against the trend in the industry, where most players court strategic investors to raise capital, rather than offering their shares to customers.

KWH is now left with a 25 per cent stake in the bank, while employees and directors hold another 25 per cent, and two strategic investors own the rest.

The idea to establish a financial institution catering specifically to women was conceived in 1981, but KWFT only became a bank in 2010, which is when it received a banking licence. It is currently the largest microfinance bank in the region, with a loan book of Sh21.3 billion and Sh31.1 billion in assets.

“That just shows you that this is a bank that can’t be ignored. We may be doing small things, but in great ways,” KWFT Managing Director Mwangi Githaiga said.

In a bid to tighten its hold on its 800,000 customers, as well as attract more depositors, the bank is now in plans to offer current accounts, cheque books and money transfer services by September.

The microfinance bank joins a growing list of local financial services providers that have recently cast their eyes on the regional market, announcing that it hopes to open branches in Rwanda and South Sudan by 2017. The bank, which has a presence in 45 of Kenya’s 47 counties, will begin feasibility studies on Rwanda next year.

Mr Githaiga said the lender has also decided to exploit the agency banking option. Already, it has 400 agencies and plans to increase this to 5,000 in five years.

“Finance inclusion is not only about working at the bottom of the pyramid, but also moving people from the bottom of the pyramid to the top,” he said.

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