Over the past 24 years, Faulu Kenya has transformed from a loan scheme into one of the top Deposit Taking Microfinance (DTM) institutions. Currently, the bank has branch network of over 80 outlets with an employee base standing at around 1,000.

According to Central Bank of Kenya (CBK), Faulu Kenya is ranked as the second largest DTM in the country after Kenya Women Finance Trust and has a customer base of over 400,000.

It is this growth that perhaps captured the attention of Old Mutual. You see, in April last year, Old Mutual acquired a 67 per cent controlling stake in Old Mutual, turning Faulu Kenya into one of its subsidiaries. The deal involved an immediate injection of Sh. 2.8 billion of the Sh. 3.6 billion buy-out price.

“This capital injection will enable Faulu Kenya to expand banking services and insurance products to more Kenyans who are financially excluded in the micro, small and medium enterprises space,” said the then Faulu Kenya managing director after the buy-out.

Further, according to Old Mutual Emerging Markets CEO Ralph Mupita, Faulu Kenya will be working together with Old Mutual’s latest acquisition UAP and Old Mutual Kenya to generate more value to clients.

“Overall, we expect the suite of businesses to collaborate more closely to generate value to customers. Our intention is to focus more on revenue-generating activities and leveraging capabilities in the wider Old Mutual Emerging Markets group,” he said. “For example, Faulu Kenya has a large retail client base and footprint – and we see good opportunities to serve the needs of this market with our short-term insurance offerings.”

The buy-out saw Faulu Kenya meet CBK’s regulatory requirements on ownership of local banks while feeding into Old Mutual’s strategy to expand its bouquet of financial services. The CBK requirements bar investors who are not banks, foreign finance companies or the government from owning more than 25 per cent stake of local banks.