The US-based Christian organization, HOPE Advancement Inc., has acquired a 51% majority stake in SMEP Microfinance Bank PLC (SMEP MFB), based in Kenya. The acquisition, approved by the Central Bank of Kenya (CBK) and National Treasury CS, was made at a cost of $4.65 million, following Section 19 (4) of the Microfinance Act. The Competition Authority of Kenya (CAK) also endorsed this move.
The deal will dilute the current 71% stake held by the National Council of Churches of Kenya (NCCK) to 34.8%. Meanwhile, the minority shareholder's stake will reduce from 28.9% to 14.2%. SMEP MFB, which controls a 5.09% market share in the microfinance banking sector, has been struggling with capital and liquidity issues for over a decade.
The acquisition by HOPE Advancement Inc., an offshoot of HOPE International Inc., is aimed at strengthening SMEP through an influx of additional capital. This is expected to facilitate business expansion, upgrade IT infrastructure, and reconstitute the board to enhance governance. SMEP MFB, headquartered at SMEP Building in Nairobi, operates 14 deposit-taking marketing offices and seven third-party agents nationwide.
This acquisition by HOPE follows a trend of foreign entities taking over Kenyan microfinance institutions. Salaam African Bank from Djibouti has previously taken over Century, Uwezo, Maisha, and Key Microfinance Banks. HOPE's portfolio also includes stakes in Urwego Bank Plc and Turame Community Finance.
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