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Oikocredit acquires minority stake in Credit Bank

NEWS
By Hillary Orinde | August 29th 2019
From left to right: Acting Chairman Credit Bank Moses Mwendwa, Director Credit Bank Grace Nyachae, Portfolio Director Africa Oikocredit International Robert Kagiri, Credit Bank CEO Betty Korir and Equity Officer East Africa Oikocredit International Anthony Gichini during the signing of the deal. [Courtesy]

Social impact investor Oikocredit has acquired a minority stake in Credit Bank after inking a Sh1 billion equity investment deal.

The bank intends to use the funding to grow its Small and Medium Enterprises (SMEs) loan portfolio and further build on the trade finance solutions already offered by the bank. 

The investment is subject to regulatory approvals and places the bank’s valuation at just over Sh4 billion.

As an investor, Oikocredit aims to work with Credit Bank in order to mainstream social impact and impact measurement into the bank’s lending activities.

Credit Bank has been pursuing partners for growth and recently the Africa Development Bank approved a debt finance facility for the bank to further extend its presence in the SMEs market.

Speaking at the signing ceremony held Thursday, Credit Bank’s Acting Chairman Moses Mwendwa welcomed Oikocredit as a shareholder “with extensive international investing experience” and pointed to a mutually beneficial relationship going forward.

“Credit Bank’s shareholders approved a rights issue at its Annual General Meeting in June 2019, which is expected to raise an additional Sh2 billion from shareholders. On boarding Oikocredit is a steadfast move towards attaining Credit Bank’s authorised capital of Sh7.5 billion, which should see Credit Bank attain Tier II status,” said Mwendwa.

Oikocredit’s Portfolio Director Africa Robert Kagiri said that Credit Bank was a right fit due to its commitment to SMEs and overall financial inclusion.

“By enabling Credit Bank to expand its lending activities to SMEs, we’re helping Credit Bank support the creation of sustainable jobs. We look forward to working with Credit Bank towards lasting social impact for people on low-incomes in Kenya,” said Kagiri.

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