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Co-operative Bank of Kenya will buy 90% of micro lender Jamii Bora Bank and the deal will complete this month, the country’s central bank said on Friday, marking further consolidation in the East African nation’s banking industry.
Co-op Bank’s takeover of Jamii Bora was first announced in March and the deal is due to complete on Aug. 21, the central bank said.
Co-op Bank, owned by Kenya’s co-operative movement, is the country’s third-biggest bank by market share with nearly 10% of the domestic market and 159 branches across Kenya and South Sudan.
Jamii Bora, which is mainly focused on lending to micro-enterprises, is the second-smallest lender in Kenya with a market share of 0.09% and 17 branches across the country.
“This transaction…will (enhance)… the resilience of the Kenyan banking sector,” the central bank said in a statement.
There are 39 banks competing in Kenya’s banking sector which has seen several mergers and acquisitions since 2016, sparked by the failure of three mid-sized and small lenders, as well as a cap on commercial lending rates, which was removed last November.
Last year KCB Group took over National Bank of Kenya, while CBA Group merged with NIC Bank to form NCBA .
The central bank said on Friday that its review of the banking sector’s business models and consolidation, “have been beneficial in enabling the sector to ride through the (coronavirus) pandemic period while supporting their customers and the economy.”