US-based Hope grows regional presence with SMEP stake
Delaware-based HOPE Advancement Inc has acquired a majority stake in SMEP Microfinance as global investors intensify their hold on the micro-lending business in Kenya. The acquisition received approval from the Central Bank on July 27 and was given the green light by the Treasury Cabinet Secretary Njuguna Ndung’u on August 4th.
“The acquisition is expected to strengthen SMEP MFB through an injection of additional capital to support business expansion, an upgrade of information technology infrastructure, and the reconstitution of the board to enhance governance,” explained the Central Bank.
Currently, SMEP is estimated to hold a market share of 5.09 percent in the microfinance banking sector and is considered a large-tier microfinance bank. SMEP operates seven branches, 14 deposit-taking marketing offices, and seven third-party agents across Kenya. Prior to the acquisition, the National Council of Churches of Kenya held 71 percent of SMEP MFB’s shares.
“The institution holds a market share of 5.09 percent in the microfinance banking sector and is considered a large-tier microfinance bank,” said the CBK.
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HOPE International
HOPE, incorporated on November 1, 2011, in the State of Delaware, is a wholly-owned subsidiary of HOPE International Inc., a charitable organization based in Pennsylvania, US. The organization has been expanding its presence in the microlending segment and now has a stake in Rwanda-based Urwego Bank Plc and Turame Community Finance of Burundi. According to a CBK update, Hope holds a 99.9 percent shareholding in Urwego Bank and a 15 percent stake in Turame Community Finance.
According to a report from the Central Bank of Kenya’s Supervision, as of December 31, 2022, microfinance banks (MFBs) reported a collective pre-tax loss of close to Kes1 billion ($7.1 million). This marks an increase from the pre-tax loss of Kes973.5 million ($6.49 million) reported as of December 31, 2021.
Previously, the CBK had announced the acquisition of Maisha Microfinance Limited by Cactus Cantina Investments Limited (Cactus Cantina), effective May 1, 2023.
By the close of 2022, a total of five banks, namely Key Microfinance Bank (formerly Remu), Century Microfinance Bank, Choice MFB based in Kajiado, Uwezo, and BitKE, were in the process of being acquired.
