Key, Century MFB acquisitions complete

Mauritius-based micro lending firm LOLC has completed the takeover of a majority stake in Key Microfinance Bank Plc, formerly Remu.

This follows the receipt of approvals from both the National Treasury and the Central Bank of Kenya (CBK).

Key MFB has a license to carry out nationwide deposit taking microfinance business and has three branches and a marketing unit in Nairobi and Meru Counties.

The MFB is classified as a small micro-lender with a market share below one per cent as at the end of 2021.

The CBK expects the 73 per cent stake acquisition in the MFB to enhance the resilience of Kenya’s micro-lending sector.

Key Microfinance which rebranded from Remu in early 2019 had been seeking additional capital to finance its expansion strategy including growing its footprint in the country.

The MFB has been betting on technology adoption to grow its micro-lending business.

Key Microfinance has previously received capital injection from Fusion Capital which took a 25 per cent stake in the micro-lender in 2014.

The deal by LOCL Mauritius, a subsidiary of Srilanka based LOLC Holdings Plc is valued at Ksh.273 million.

At the same time, the CBK has announced the acquisition of an 85 per cent stake of Century Microfinance Bank by digital lender Branch International.

The firm, also incorporated in Mauritius, is owned by Branch International Inc, a US based mobile only lender with assets valued at over Ksh.1 billion.

Century is also categorized as a small micro-lender with two branches in Nairobi’s Moi Avenue and inside the Gikomba market.

The deal marks the first buyout of a legacy lender by a digital lender in the country.

Last week, the National Treasury exempted Branch from regulations that would have limited it from holding a stake above 25 per cent in the MFB.