Fintech companies are now eyeing a pie in Kenya's microfinance banking sector in strategy to expand their market.
Global digital lender Branch International on Tuesday announced its acquisition of 84.89 per cent shareholding of Kenya's Century Microfinance Bank Limited as it rolls out plans to become pan-African digital bank.
This follows Central Bank of Kenya’s approval on December 30, 2021.
CBK welcomed the deal saying it as a critical component of Century MFB’s transformation plan.
"It will strengthen Century MFB and support the stability of the microfinance banking sector," CBK said in the approval.
Speaking at the formal signing ceremony, Branch International CEO Matt Flannery said the lender which currently serves customers in Kenya, Tanzania, Nigeria and India will be investing heavily in its new strategic venture.
Branch’s total assets stood at Sh.1.1 billion as at December 31, 2020.
Branch becomes the first digital lender to venture into microfinance banking. It hopes to begin operations before the year end.
The deal, according to Branch, will allow deposit-taking financial services while enhancing lending for both individuals and Small and medium-sized enterprises clients.
"Branch International engaged a number of potential investment partners locally but settled on Century Microfinance which ticked many of the boxes and remains a right partner for the journey ahead," Flannery said.
CBK has been working with microfinance banks to transform their operations.
"This has been underpinned by advances in technology, innovation and customers drive towards Anytime Anywhere services," Njoroge said in February.
In response to this changing terrain, CBK has been working with MFB’s to transform their operations to be customer centric, leveraging on technology and innovation, and strengthening capital and liquidity buffers.
Last week, CBK launched the National Payment Strategy, where it adopted digital currency
It has began collecting views from the public on the adoption of digital currencies.
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