Salaam African Bank, the leading bank by branch network in Djibouti, has acquired 100% ownership in Kenya’s Uwezo Microfinance Bank, giving the lender a presence in Kenya’s banking industry. The acquisition took effect on March 25, 2021, after obtaining approval from the Central Bank of Kenya and the Cabinet Secretary for the National Treasury and Planning.
Microfinance institutions are key drivers of the Kenyan economy as they provide financing to micro, small and medium-sized businesses who form nearly 85% of all enterprises in the country.
Salaam Bank is one of three Islamic banks in the horn of Africa nation and it holds 30% of the bank accounts in Djibouti. The lender has the highest number of bank branches and Automated Teller machines in the country. In addition, the Djibouti based Bank owns Salaam Investment Bank Kenya Limited, a Sharia-compliant investment bank licensed by the Capital Markets Authority (CMA).
Uwezo Microfinance Bank has been in operation since November 2010, first as a community Microfinance Bank operating in Starehe Division and then as a nationwide Microfinance Bank. As of 31st March 2021, Uwezo Microfinance Bank was ranked in position 10 out of 14 Microfinance Institutions in Kenya and controlled 0.45% of the market share in the Microfinance banking sector.
The Central Bank of Kenya welcomed the move which it sees as a way to strengthen the resilience of Kenya’s microfinance banking sector.