Jamii Bora Solidifies its Working Capital

Jamii Bora Bank is planning to increase its Small Medium and Enterprises (SME) lending book after the lender raised 1.2 billion shillings through an equity investment from two PE firms. Jamii Bora Bank is 30th in the Kenyan banking market share with 0.47 percent and one whose products target SMEs as well as small businesses. Equator Capital Partners and Progression Capital Africa Ltd have jointly given a stake to Jamii Bora Bank.

This implies that Jamii Bora Bank now has two new investors on board. It is not yet know how much shares will the new investors hold in the bank but sources indicate that the lender has created some additional shares to accommodate the new investors.

According to the policies of these two new investors to Jamii Bora Bank, Equator Capital invests between 3 million US Dollars or 300 million shillings and 12 million US Dollars or 1.2 billion shillings for an ownership of between five and 25 percent of a financial institution while Progression Capital’s investment criteria often relies on it putting between 2 million US Dollars or 200 million shillings and 8 million US Dollars or 800 million shillings for what it terms significant minority stakes and full board participation rights and according to the C.E.O Jamii Bora Bank, the new investment will see the lender increase its lending to the SMEs.

The coming of Equator Capital Partners and Progression Capital Africa Ltd follows that of Catalyst Principal Partners which raised its stake in Jamii Bora Bank to eleven percent.

Jamii Bora Bank is one of Kenya’s Fastest Growing Banks, with a dedicated customer base of over 360,000, with 26 fully-fledged Central Bank of Kenya-approved Branches. In December 2011 the Bank’s Board of Directors successfully concluded a rights issue that shored the Bank’s capital base by raising Kshs. 270 million from the shareholders and introduced a strategic investor, Asterisk Holdings Ltd., who injected a further Kshs. 320 million. Asterisk Holdings Ltd also took up the responsibility of proposing management for the next five years, to oversee the Bank’s turnaround strategy.

 The Bank raised an additional 520 million shillings via a rights issue concluded in December 2012, bringing the Bank’s core capital to 1.3 billion shillings. This means that the Bank raised over 1 billion shillings in capital since October 2011, thereby positioning itself for sustained growth and demonstrates the confidence shareholders and investors at large have in the Bank’s new direction.

Article by Juma Fred.