The Central Bank of Kenya (CBK) has announced the acquisition of 51 percent of the shareholding of SMEP Microfinance Bank PLC (SMEP MFB) by HOPE Advancement Inc. (HOPE).
Prior to the acquisition, the National Council of Churches of Kenya held 71 percent of SMEP MFB’s shares. The institution controls a market share of 5.09 percent of the microfinance banking sector and is considered a large-tier microfinance bank.
SMEP becomes the latest firm to sell its stake to a foreign firm. Others that have been targets of acquisitions over the last three years include Century Microfinance Bank, Choice Microfinance Bank, Maisha Microfinance Bank, and Key Microfinance Bank, as well as Salaam African Bank, the leading bank by branch network in Djibouti, which acquired 100% ownership in Kenya’s Uwezo Microfinance Bank, a deal that was signed in 2021.
HOPE was incorporated on November 1, 2011, in the State of Delaware, USA. It is a wholly owned subsidiary of HOPE International Inc., a charitable organization based in Pennsylvania, USA. HOPE acts as the holding company for investments and microfinance activities of the group.
Some of the microfinance institutions where HOPE holds shares include Urwego Bank Plc of Rwanda (licensed and regulated by the National Bank of Rwanda and where it owns 99.9 percent shareholding) and Turame Community Finance of Burundi (licensed and regulated by the Bank of Burundi where it has 15 percent shareholding).
SMEP MFB was licensed by CBK on December 14, 2010, and has its Head Office located at SMEP Building, Nairobi. The MFB has 7 branches, 14 deposit-taking marketing offices, and 7 third-party agents situated across the country.
The acquisition is expected to strengthen SMEP MFB through injection of additional capital to fund business expansion, upgrade of information technology infrastructure as well as reconstitution of the board to bolster governance.