Saturday, October 1, 2022

Co-op Bank set to deepen lending to small businesses

Co-op Bank SME Loans: The Co-operative Bank will deepen lending to small and medium businesses once it acquires the Jamii Bora Bank.

In a market review by global rating agency Moody’s, the acquisition of the Jamii Bora Bank will provide Coop Bank with the platform to grow its SME loan book.

“Co-op Bank will absorb JBB, Kenya’s second-smallest bank without affecting its credit quality and will gain JBB’s small and midsize enterprises focused business,” said Moody’s. “The acquisition would be credit positive for both banks and the country’s banking system. JBB’s SME-focus and expertise will help Co-op Bank expand its SME footprint in Kenya.”

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In the same vein, Moody’s says that Jamii Bora Bank will ride on Co-op Bank’s strength to gain greater access to capital and funding, which will help it generate economies of scale and stabilize its financial position.

“The group has continued with a strategy for continued deepening and dominance in our domain market segment leveraging on our successful penetration of the micro, medium and small enterprises (MSMEs) and the Saccos, while reviewing opportunities to grow alternative income streams,” Co-operative Bank’s chief executive officer Gideon Muriuki said.

The bank is now expected to acquire Jamii Bora Bank in a growth drive that is expected to solidify its position as one of the leading top banks in the country. “The acquisition of Jamii Bora Bank will offer Co-op Bank the opportunity to cross-sell and deepen product offering to the enhanced customer base, and create a niche bank to offer specialized credit offerings that include MSME banking, microfinance, youth and women banking, asset finance and leasing,” Dr. Muriuki said.

The Co-op Bank was started in 1965 and is predominantly owned by 15 million members of the Kenyan co-operative movement. It was listed on the Nairobi Securities Exchange in 2008. It was ranked 4th out of 39 banks in terms of market share as at December 31, 2019 with a market share of 9.63 per cent. The bank has a 159 branches across Kenya and South Sudan. Co-op Bank SME Loans.

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