This article was added by the user . TheWorldNews is not responsible for the content of the platform.

CBK approves PE firm 20pc stake purchase in Credit Bank


CBK approves PE firm 20pc stake purchase in Credit Bank

Monday May 22 2023

Credit Bank CEO Betty Korir. FILE PHOTO | NMG

Mauritius-based private equity fund Shorecap III, LP has received Central Bank of Kenya (CBK) clearance to acquire a 20 percent stake in Credit Bank, deepening deals in the Kenyan banking sector.

CBK in a Monday notice said Shorecap will acquire the stake on June 15, 2023, following the approval of the deal on April 24. The Competition Authority of Kenya also cleared the deal in November last year.

“CBK welcomes this transaction that will diversify and strengthen the resilience of the Kenyan banking sector,” said the regulator in a statement.

Shorecap is owned by ShoreCap III GP Limited, African Development Bank Group, CDC Holdings Guernsey Limited, European Investment Bank, KfW Development Bank and Oesterreichische Entwicklungsbank AG. 

The private equity fund’s business model mainly focuses on investing in inclusive financial services in Asia and Africa. Shorecap will be assigned 7.3 million shares in the Credit Bank.

Credit Bank was licensed by CBK as a non-banking financial institution in 1986 under the name Credit Kenya Limited and converted to a fully-fledged commercial bank in 1995. 

The lender has 17 branches, spread across the country and mainly focuses on the provision of banking services to small corporates and micro, small and medium-sized enterprises (MSMEs). 

As at March 31, 2023, CBK categorises it as a small bank with a market share of 0.5 percent in an industry that has 39 banks.

Credit Bank in 2018 received approval from shareholders to enter into discussions with potential investors for the placement of shares to new investors.

The bank last year, announced it had signed an agreement with Shorecap III, LP for the sale of a 20 per cent stake, pending regulatory clearance. 

[email protected]