American charity organization, HOPE Advancement Inc has completed the acquisition of a majority stake in SMEP Microfinance Bank for undisclosed amount, the central bank has said.
The deal follows approvals by the Central Bank of Kenya (CBK) on July 27, 2023 and the Cabinet Secretary for the National Treasury and Economic Planning on August 4, 2023.
“The acquisition is expected to strengthen SMEP MFB through injection of additional capital to fund business expansion, upgrade of information technology infrastructure as well as reconstitution of the board to bolster governance,” said CBK.
Prior to the acquisition, the National Council of Churches of Kenya (NCCK) was the majority shareholder with a 71pc stake.
The microfinance lender which was licensed by CBK on December 14, 2010 currently has 7 branches, 14 deposit taking marketing offices, and 7 third party agents situated across the country and controls 5.09pc of the microfinance banking sector market share.
“We believe that this will strengthen our capacity to navigate the complex business environment and enable us to deliver sustainable growth,” said Dr Nelson Kuria, SMEP MFB Chairman in its financial statement.
The new acquisition by the American organization now strengthens its foothold in the region.
HOPE Advancement Inc. owns 99.9pc shareholding in Urwego Bank Plc of Rwanda and Turame Community Finance of
Burundi where it has 15pc shareholding.
HOPE was incorporated on November 1, 2011 in the US and is a
wholly owned subsidiary of HOPE International Inc., a charitable organization based in Pennsylvania.
HOPE acts as the holding company for investments and microfinance activities of the group.
As at December 30, 2022, SMEP MFB reported gross profits of Ksh 10.8 million, a total income amounting to Ksh 684 million and assets totaling Ksh 3.2 billion.
The institution also had customer deposits to the tune of Ksh 2.24 billion and net loans amounting to Ksh 1.4 billion.