Businesses & Financial News

CBK flags Branch’s majority acquisition in Century MFB

By Seth Emmanuel

Digital lender, Branch International Ltd through its local subsidiary, Branch Kenya, yesterday announced the acquisition of a majority stake in Century Microfinance Bank Limited (Century MFB) following ministerial exemption and regulatory approvals by the Central Bank of Kenya (CBK).

Effective January 1, 2022, the transaction will now see Branch Kenya embark on a landmark transition as the first digital lender to expand into the microfinance banking market, in a deal that will also allow the lender to offer deposit-taking financial services and lending options for individuals and SME clients.

The CBK approval follows a similar regulatory nod by the Competition Authority of Kenya (CAK) in May last year in what will now see Branch Kenya take full control of Century Microfinance Bank’s full range of financial services such as savings accounts and credit facilities to its more than 26,000 clients in the country.

The deal, according to Branch East Africa Managing Director Rose Muturi is expected to help accelerate efforts by the brand to expand its local operations into a Pan-African digital lender across the target markets.

“Branch International has received the approval news with excitement as this development now sets us on a growth path to deliver differentiated personal finance solutions for our growing customer base in Kenya,” Muturi said.

Prior to the buyout – Century Micro Finance Bank founded in 2012 as the seventh Micro Finance Bank (MFB) in Kenya was first set up as a deposit-taking microfinance institution with keen focus on agricultural finance to offer agriculture-based credit and savings products.

But had expanded its portfolio to cover other financial services to the micro, small and medium enterprises (MSMEs) that serve the farmers as suppliers and buyers.

“The acquisition would boost the national financial inclusion efforts as the firm continues to adapt and deliver digital-driven solutions,” commented Century Microfinance Bank Chairman Peterson Mwangi.

Branch is headquartered in San Francisco, United States and also operates in India, Tanzania, and Nigeria. It has been working to break the traditional financial access barriers such as a credit score and bank account by tapping into the rise of mobile technology to reach underserved populations in its operating markets.

The firm has so far managed to digitally disburse more than US$ 600million to a growing customer base of more than 4million customers.

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