Microfinance bank sold to US-based investor for $4.6 million, CBK

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Microfinance bank

The acquisition of a 51 percent controlling stake in SMEP Microfinance Bank PLC (SMEP MFB) has been accomplished by Hope Advancement Inc. (HOPE).

The acquisition was approved on July 27, 2023, under Section 19(4) of the Microfinance Act, according to a statement released by the Central Bank of Kenya (CBK) on November 2. The Cabinet Secretary for the National Treasury and Economic Planning further endorsed the acquisition on August 4, 2023.

On November 1, 2011, HOPE was incorporated as a wholly owned subsidiary of HOPE International Inc., a charitable organization with its headquarters located in Pennsylvania, USA.

The company acts as a holding company for investments and microfinance operations worldwide, holding significant stakes in microfinance establishments such as Rwanda’s Urwego Bank Plc and Burundi’s Turame Community Finance.

With its headquarters located at SMEP Building, Kirichwa Road, Off Argwings Kodhek Road, Nairobi County, and a license granted by CBK on December 14, 2010, SMEP MFB has grown to be a major force in the microfinance banking industry.

By the end of 2022, SMEP’s total portfolio was valued at over $14 million (Sh2 billion), according to HOPE International.

The National Council of Churches of Kenya, which formerly held a 71 percent ownership stake in the institution, now holds a sizable 5.09 percent market share.

For SMEP MFB, the acquisition is expected to result in revolutionary changes.

It is anticipated that HOPE’s additional capital infusion will support business expansion plans and make it easier to upgrade the information technology infrastructure, which is desperately needed.

In addition, the institution plans to improve its governance procedures by reconstituting the board.

This calculated move is made at a time when demand for creative financial solutions is rising and competition in the microfinance industry is becoming more intense.

It is anticipated that the collaboration between SMEP MFB and HOPE will generate synergy that will benefit the bank as well as the general advancement of Kenya’s microfinance scene.

Experts in the field are closely monitoring the developments in hopes of seeing a positive knock-on effect for SMEP MFB’s service delivery and market positioning.

Stakeholders are confident that HOPE will be able to capitalize on opportunities and overcome obstacles to promote financial inclusion and long-term growth in the microfinance industry.

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