SMEP Microfinance, a church-owned lender, has secured a strategic investor to inject capital and set it on a path for growth after a decade-long search.
Shareholders, in an extraordinary general meeting (EGM), voted for a 51 per cent acquisition by Hope International, a US-based Christian non-profit institution pending regulatory approval in a deal worth $4.6 million (Sh577.8 million).
SMEP chairman Nelson Kuria noted that the journey of capital raising had taken 12 years, starting with the restricted public offer in 2012 to 2013, to private placements and additional drives to new and existing shareholders consisting of churches and members of the public in 2013.
This saw the dilution of the National Council of Churches of Kenya (NCCK) to the current 71.1 per cent shareholding from the initial 100 per cent. "The search for a strategic investor has been a long and painstaking journey as we have been looking for investors aligned to our mission with a long-term perspective in terms of SMEP's growth and development as opposed to the short-term growth by many equity investors which results in mission drift," said Mr Kuria underscoring that it was the best deal for SMEP.
"This is a defining moment as it heralds a new dawn with heightened impetus in the transformation journey to make SMEP a better and true Christian finance Institution with real impact in line with our mission of enhancing inclusion and transforming the lives of millions of Kenyans in the low-income sector of the population."
SMEP has about 40 branches and offers a variety of financial products and insurance. It is owned by over 15,700 shareholders with the majority shareholder being NCCK which owns 71.1 per cent of the shares.
The deal will see NCCK's majority stake diluted to 34.8 per cent while the minority shareholders' stake will be reduced to 14.2 per cent from 28.9 per cent.