19 October 2010

Kenya: Investors Inject Sh1 Billion Into Family Bank

Nairobi — Family Bank is now planning to expand across the East African region after strategic investors injected over Sh1 billion into the business as new capital.

The micro-finance bank will also be opening 10 more branches by 2011 to bring its branches to 63 in Kenya, as it prepares to list at the Nairobi Stock Exchange (NSE).

"We now want to move over to other areas in the East African region and list at the stock market in the near future to unlock our shareholders value," bank chief executive office Peter Kinyanjui said on Tuesday when launching its re-branding at the Kenyatta International Conference Centre.

Mr Kinyanjui, however, did not give the time frame within which they will carry out either their regional expansion or listing at the NSE.

A consortium of investors led by a Mauritius-based private equity fund, AfricInvest, injected an estimated Sh1.2 billion for a 24.99 per cent stake in the bank as part of the two institutions move to strengthen their position in Kenya's financial sector.

Others in the consortium also includes FMO of the Netherlands and Norway's Norfund.

Speaking during the occasion, the bank's chairman, Titus Muya, noted that the decision to bring in the strategic investors was inline with their growth plans.

The bank has been pivotal in lending to the small and medium scale enterprises in Kenya.

"We are now the fifth largest bank in customer base and branches in the banking industry with the coming of our partners," explained Mr Muya.

The new capital ranks Family Bank among the big banks in the country with a capital base of Sh3 billion.

Starting out as a building society 26 years ago, it received a license in 2007 from the industry regulator, Central Bank of Kenya, to operate as a commercial bank.

The micro-finance bank is now home to 800,000 account holders with Sh19 billion asset base.

During the meeting, Prime Minister Raila Odinga who was the chief guest applauded the bank for its achievements over the years.

He, however, appealed to the financial institution and other commercial banks to lower their lending rates.

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