Maisha Microfinance Bank Seeks Ksh 1 Billion Capital Injection

By Soko Directory Team / May 15, 2019




Maisha Microfinance Bank is seeking for 1 billion shillings that will be used as a capital injection that will cushion it from the new accounting system.

According to a statement from the lender, the new capital will be set aside for “anticipating risky loans” as well as investing in technology and funding growth in the business.

Microfinance businesses in Kenya are currently facing stiff competition from digital lenders who have taken up a big number of Kenyans in search of instant loans.

“The Bank requires adequate capital to roll out an expansive portfolio of innovative and customer-led products and services.  To this end, the Bank initiated a standard regulatory procedure with the intent to recapitalize the bank,” said Mr. Iraneus Gichana, the CEO of the financial institution.

The lender plans to recapitalize in a strategy that will enable it to withstand any market pressures and “cushion against potential effects of IFRS9 loan provision requirements.”

“The Bank has been in operation for less than three years. During this infancy period, Maisha Microfinance Bank focused on laying the foundation for future growth prospects. All the bank’s existing shareholders have supported the bank continually with the injection of additional capital. With this capital, the bank will be able to build a resilient business model capable of addressing the huge demand for financial services. The Bank’s re-capitalization strategy enables it to withstand any market pressures and cushion against potential effects of IFRS9 loan provision requirements,” added Mr. Gichana.

According to the 2006 Microfinance Act section 19 (1),  “No person shall hold, directly or indirectly or otherwise have a beneficial interest in, more than twenty-five percent of the shares of an institution.”

The Act further provides in section 19 (3b) for “exemption by the Treasury Cabinet Secretary on the recommendation of the Central Bank of Kenya,” to exceed the 25% single shareholder threshold for a specific period

Once the exemption request is received and evaluated by Central Bank, it is then submitted to Treasury, for consideration and approval by the Cabinet Secretary. If granted, the institution is expected to have in place a divestiture plan within a specific period to ensure the single shareholder limits are observed back to a maximum of 25 percent.

Maisha Microfinance Bank sought an approval to allow one of its shareholders, KAMU Limited, to hold in excess of 25 percent of the Bank’s issued share capital.

After a rigorous review process, the Cabinet Secretary for the National Treasury considered and granted approval to the bank’s request for exemption from the provisions of section 19(1) of the Microfinance Act. This allows Kamu Limited to hold in excess of 25 percent of Maisha Microfinance Bank’s issued share capital for the period specified in the Gazette notice.

The exemption granted is for a period not exceeding four years with effect from March 1, 2019. Details of this exemption are contained in Kenya Gazette Supplement No. 41 dated April 5, 2019.

This is a major milestone for the bank as it enables it to pursue its growth strategies. This is neither a buy-out nor a sale transaction; it is merely an injection of additional capital to support the bank’s growth strategies.

Kamu Limited is one of the CBK-approved shareholders of Maisha Microfinance Bank. KAMU is a strategic investment vehicle, which over the years has diversified its investment portfolio. It is owned by the Kangwana family which has investments in the financial, insurance, hospitality, and real estate sectors.



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team


More Articles From This Author








Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE

ARCHIVES

2019
  • January 2019 (256)
  • February 2019 (216)
  • March 2019 (285)
  • April 2019 (254)
  • May 2019 (272)
  • June 2019 (252)
  • July 2019 (340)
  • August 2019 (227)
  • 2018
  • January 2018 (291)
  • February 2018 (219)
  • March 2018 (278)
  • April 2018 (225)
  • May 2018 (238)
  • June 2018 (178)
  • July 2018 (257)
  • August 2018 (249)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (284)
  • December 2018 (187)
  • 2017
  • January 2017 (183)
  • February 2017 (195)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (165)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (246)
  • June 2016 (183)
  • July 2016 (271)
  • August 2016 (249)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (109)
  • May 2015 (117)
  • June 2015 (121)
  • July 2015 (150)
  • August 2015 (157)
  • September 2015 (189)
  • October 2015 (170)
  • November 2015 (174)
  • December 2015 (208)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950