The transaction marks the successful outcome of BII and I&M’s equity partnership for over 7 years as AfricInvest takes over.
The institution said that the sale to a like-minded investor is one of the most significant transactions in East Africa in recent years and represents a vote of confidence in the region’s financial services sector.
It is listed on the Nairobi Securities Exchange, and the Rwandan subsidiary I&M Bank Rwanda PLC is listed on the Rwanda Stock Exchange.
British International Investment (‘BII’)
British International Investment (‘BII’), the UK’s development finance institution and impact investor, has sold its 10.1 per cent stake in I&M Group PLC, the Eastern African banking group, to AfricInvest, a leading Pan-African Asset Management platform.
The acquisition was made through East Africa Growth Holding, a special-purpose vehicle owned by AfricInvest.
I&M Group PLC is a leading banking group in Eastern Africa with a presence in Kenya, Mauritius, Tanzania, Rwanda, and Uganda, offering financial services to individuals, Micro, Small and medium-sized enterprises (MSMEs), and corporates across the region.It is listed on the Nairobi Securities Exchange (Kenya), and the Rwandan subsidiary I&M Bank Rwanda PLC is listed on the Rwanda Stock Exchange.BII is a Public Limited Company wholly owned by the Department for International Development (DFID) on behalf of the UK government. It concentrates on supporting companies in the low and middle-income countries of Sub-Saharan Africa and South Asia.
It made its investment in I&M in 2016. The sale is one of the most significant secondary transactions in East Africa in recent years.
The commitment made by AfricInvest, a leading, Africa-focused growth equity and private debt investor, also underlines the confidence of the commercial and impact investment community in the financial services sector in the region.
The transaction coincides with the 50th anniversary of I&M Bank Limited, the anchor subsidiary of the Group, which was incorporated on May 14, 1974, as a financial services company before earning a commercial banking license in 1980.
The bank grew exponentially through an aggressive inorganic growth strategy, which saw a series of regional mergers and acquisitions.
Maximilian Biswanger, Investment Director at BII, said: “Having been a trusted equity partner to I&M for over seven years, today’s announcement represents a great outcome to BII’s engagement, as we exit to a like-minded partner with a focus on commercial sustainability and development impact.”
I&M Group PLC is a leading banking group in Eastern Africa. [Photo/I&M]Since BII’s original investment, I&M Group PLC has expanded its role as a champion to the region’s business community and aspiring personal banking clients, constituting a significant driver for sustainable economic development in the area, Biswanger noted.Julius Tichelaar, Senior Partner at AfricInvest, noted that I&M Group PLC has established strong franchise in East Africa and the Indian Ocean over the past five decades, with an excellent reputation, the highest integrity and governance standards, and a track record with quality and consistency in performance and earnings.“AfricInvest is extremely proud and honoured to be extending its partnership with I&M Group PLC beyond AfricInvest’s investment in I&M Bank Rwanda,” Tichelaar said in a statement.
Speaking from Nairobi, I&M Group PLC Executive Director Sarit Raja-Shah said: “It is notable that when BII invested in the company, we had just embarked on our iMara Strategy which was to be implemented in three cycles. Now, as we usher in Africinvest we have just initiated the third iteration of that strategy which has sustainability at its centre and pays respect to the economic, social and climatic state of our planet”.
“The years since 2016 saw us bolster our position as a leading financial services conglomerate in Eastern Africa with BII’s commercial and technical support and we are positive that Africinvest’s investment will provide the Group the support to build on the progress we made with their predecessor,” he added.
The new shareholders’ demonstrated focus on Sub-Saharan Africa inspires confidence that the Group will be able to continue the growth momentum and enhance financial inclusion in the markets where it operates, he noted.
I&M Group PLC has recorded significant commercial growth since BII’s investment in 2016, having almost tripled its loan book from $1.04 billion to $2.4 billion and its customer base from 100,000 to over 500,000.
This growth, amongst others, resulted in the bank reaching Tier 1 status in the Kenya banking industry in 2019. It has also been a pioneer for digital financial services in the region.
In addition, despite notable headwinds, I&M Group PLC increased its lending to SMEs throughout its investment (supporting the UN’s Sustainable Development Goal (‘SDG’) 9.3 and SDG 8.10).
Management said I&M Group PLC is also committed to setting an example for the environment (SDG 13) through sustainable solutions for clients, such as a green energy lending scheme worth $46.3 million and reducing its operations’ carbon emissions.
In alignment with its strategy, AfricInvest is expected to continue championing I&M’s sustainability journey, supporting its commitment to creating lasting, sustainable environmental and social value.
BII has actively supported I&M Group PLC in this journey as a committed shareholder and partner, resulting in critical strategic and operational developments under the Group’s iMara strategy, including enhancing the bank’s value proposition for SME and personal banking clients, with various innovative products launched including the only free bank to mobile wallet transfer offering and Kenya’s largest unsecured personal loan which was introduced to the market through an award-winning marketing campaign.
Net promoter scores expressing client satisfaction doubled in recent years, from approximately 34 per cent to close to 70 per cent.
Digital transformation through the launch of innovative digital channels has significantly increased the active digital customer base to over 75 per cent. In comparison, digital transactions accounted for over 80 per cent in 2023.
Expanding regional presence in Eastern Africa has been strong, most notably in the expansion into Uganda in 2020. Non-Kenyan subsidiaries now accounted for approximately 24 per cent of the Group’s profits in 2023.
Africinvest completes purchase of I&M stake.[Photo/]
BII’s impact thesis for investing in I&M Group PLC included supporting the bank’s expansion outside of Kenya, expanding its client segments, and improving its customer value proposition in Kenya, both of which were achieved during the lifetime of the investment.In addition, BII and I&M have cooperated on several value-added initiatives for environmental, social, and governance (ESG) and governance improvements.“BII’s ESG team worked with I&M on E&S capacity building initiatives by offering training to stakeholders and collaborating on the development of bank-wide E&S tools. BII’s dedicated Business Integrity team supported I&M to help enhance their financial crime and anti-corruption procedures,” the firms said in a joint statement.
AfricInvest has been committed to the financial services industry for over three decades and has seen rapid innovation and disruption.
Leveraging I&M’s solid digital infrastructure and innovative drive to cater to evolving customer needs, AfricInvest is uniquely equipped to collaborate and support the Group in its regional expansion.
Having previously acquired a 24.76 per cent share in I&M Bank Rwanda in 2019, AfricInvest aims to further contribute to a resilient and impactful financial services industry in East Africa through this investment.
