Credit Bank, a middle tier bank in Kenya is eagerly awaiting the Central Bank of Kenya approval to initiate a Ksh 1 Billion transaction signed last month.
The bank has made an expression of intent in capturing the Small and Medium Entreprises (SMEs) segment by partnering with Netherlands based social impact investor Oikocredit by signing the Ksh. 1bn equity investment.
The investment, which is subject to regulatory approvals, will see Oikocredit take a minority stake in Credit Bank. As an investor, Oikocredit will work with Credit Bank to mainstream social impact and impact measurement into Credit Bank’s lending activities.
Speaking at the signing ceremony held last month in Nairobi, Moses Mwendwa, Credit Bank’s Acting Chairman, said: “We welcome Oikocredit as a shareholder with extensive international investing experience and an emphasis on social impact. We look forward to a mutually beneficial relationship.
“Credit Bank’s shareholders approved a rights issue at its Annual General Meeting in June 2019, which is expected to raise an additional KES 2bn from shareholders. Onboarding Oikocredit is a steadfast move towards attaining Credit Bank’s authorised capital of KES 7.5bn, which should see Credit Bank attain Tier II status.”
Oikocredit’s Portfolio Director – Africa, Robert Kagiri, said, “Oikocredit is very pleased to be making this equity investment. Credit Bank is a good fit for our organisation’s mission because of its strong commitment to its SME customers and to financial inclusion. By enabling Credit Bank to expand its lending activities to SMEs, we’re helping Credit Bank support the creation of sustainable jobs. We look forward to working with Credit Bank towards lasting social impact for people on low-incomes in Kenya.”
Oikocredit’s loans, equity investments, and capacity building aim to enable people with low incomes in Africa, Asia, and Latin America to improve their living standards. Oikocredit finances over 700 partners in over 30 countries, with total outstanding capital of € 1 Billion.
“The investment will increase our lending capacity and contribute to the creation of sustainable jobs. The lasting social impact on the low-income sections of the society will bring about financial inclusion. This will partly be achieved through broadening and deepening our Trade Finance solutions that have come to benefit entrepreneurs.”
