6 May 2019, …Nairobi, Maisha Microfinance Bank is the thirteenth deposit taking microfinance bank in Kenya, licensed by the Central Bank of Kenya in June 2016.
The vision of the Bank is to empower enterprises and communities for life. Since inception the Bank has issued in excess of KSH 1.3Bn in form of loans to micro clients and is home to more than 170,000 customers.
Maisha Microfinance Bank is currently in pursuit of a robust growth strategy that will support its vision to bridge the financial inclusion gap.
To realize this dream, the Bank requires adequate capital to roll out an expansive portfolio of innovative and customer-led products and services. To this end, the Bank initiated a standard regulatory procedure with intent to recapitalize the bank.
The 2006 Microfinance Act provides for an institution to apply for exemption from 25% single shareholder limit capping as a capital injection strategy.
According to the 2006 Microfinance Act section 19 (1), “No person shall hold, directly or indirectly or otherwise have a beneficial interest in, more than twenty five percent of the shares of an institution.”
The Act further provides in section 19 (3b) for “exemption by the Treasury Cabinet Secretary on the recommendation of the Central Bank of Kenya,” to exceed the 25% single shareholder threshold for a specific period.
Commenting on the need for recapitalization, the bank’s CEO Mr. Ireneus Gichana said, “The Bank has been in operation for less than three years. During this infancy period Maisha Microfinance Bank focused on laying the foundation for future growth prospects. All the bank’s existing shareholders have supported the bank continually with injection of additional capital. With this capital, the bank will be able to build a resilient business model capable of addressing the huge demand for financial services.”
He added, “The Bank’s re-capitalization strategy enables it to withstand any market pressures and cushion against potential effects of IFRS9 loan provision requirements.”
Once the exemption request is received and evaluated by Central Bank, it is then submitted to Treasury,for consideration and approval by the Cabinet Secretary. If granted, the institution is expected to have in place a divesture plan within a specific period to ensure the single shareholder limits are observed back to a maximum of 25%.
Maisha Microfinance Bank sought an approval to allow one of its shareholders, KAMU Limited, to hold in excess of 25 per cent of the Bank’s issued share capital.
After a rigorous review process, the Cabinet Secretary for the National Treasury considered and grantedapproval to the bank’s request for exemption from the provisions of section 19(1) of the MicrofinanceAct. This allows Kamu Limited to hold in excess of 25 percent of Maisha Microfinance Bank’s issued share capital for the period specified in the gazette notice.
The exemption granted is for a period not exceeding four years with effect from March 1, 2019. Details of this exemption are contained in Kenya Gazette Supplement No. 41 dated April 5, 2019.This is a major milestone for the bank as it enables it to pursue its growth strategies. This is neither a buy-out nor a sale transaction; it is merely an injection of additional capital to support the bank’s growth strategies. Kamu Limited is one of the CBK-approved shareholders of Maisha Microfinance Bank. KAMU is a strategic investment vehicle, which over the years has diversified its investment portfolio. It is owned by
the Kangwana family which has investments in financial, insurance, hospitality and real estate sectors.