Mobile phone lender Branch International has acquired micro finance lender Century Microfinance. The acquisition follows the approval by the National Treasury and the Central Bank of Kenya.
The Treasury exempted Branch from the Section 19 of the Microfinance Act (for 4 years through 2025) law that limits individual shareholding in microfinance to 25 per cent. This paved the way for the acquisition of a 84.89 per cent stake in the microfinance lender for undisclosed fee. The acquisition came into effect on January 1, 2022.
The acquisition first received approval from the CBK on December 30, 2021, before getting the Treasury’s nod on January 7, 2022. “Branch is one of the largest mobile application based lenders in the country and brings financial services to the emerging markets by leveraging on the powers of technology. Branch’s total assets stood at Sh. 1.1 billion as at December 31, 2020,” CBK said in a statement.
In May last year, Branch had received approval from the Competition Authority of Kenya (CAK) to acquire 84.9 per cent stake in the lender. CAK directed that the two financial institutions to maintain the terms agreed with borrowers in respect to existing loans prior to the acquisition. They were also asked to retain their existing performing and non-performing loans (NPLs) in accordance with their terms until their expiry.
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Century Microfinance was licensed in 2012 to carry out microfinance banking business across the country. The micro lender with less than 1 per cent of the market share currently has two branches in Nairobi with a customer base of 26,000 comprising small holder farmers and Small and Medium Enterprises.
On the other hand, Branch is among pioneer digital lenders in Kenya. The firm describes itself as a machine-learning provider of mobile financial services to emerging markets. It was founded in 2015 and operates in Kenya, Nigeria, India and Mexico is headquartered in San Fransisco California.
