The Central Bank of Kenya (CBK) gave the NCCK until 2014 to keep its ownership at a maximum of 25 per cent in SMEP in line with regulations that bars investors who are not banks, foreign finance companies or the government from owning more than a quarter of Kenya’s banks.
SMEP Deposit Taking Microfinance Ltd (SMEP DTM) is seeking to raise Sh1.6 billion in a public offer that will be restricted to church-affiliated institutions, individuals, and the micro lender’s customers.
The NCCK owns SMEP, which it set up in 1977, but its stake is expected to reduce up to slightly below a third, depending on the level of investor subscription.
“The shares, if fully subscribed, shall comprise 68.14 per cent shareholding of SMEP DTM,” said SMEP DTM chairman Gabriel Kivuti, in a statement issued on Friday. A summary document on the unlisted public offer says the money is to be raised through issuing 145 million shares at a Sh11 offer price per share. It will also be in three pools, linked mainly to the church.
The Central Bank of Kenya (CBK) gave the NCCK until 2014 to keep its ownership at a maximum of 25 per cent in SMEP in line with regulations that bars investors who are not banks, foreign finance companies or the government from owning more than a quarter of Kenya’s banks.
“SMEP is an affiliate of the National Council of Churches of Kenya and it becomes the first religious institution to raise capital through a public offer,” said the Capital Markets Authority in a statement issued on Friday.
SMEP’s management will use the money raised to increase its working capital, upgrade its branches and build a new office block in Nairobi. The lender’s management said raising additional capital would increase its lending and deposit-taking capacity.
The sale will be subdivided into three pools, with the expectation that most of the cash will come from church-affiliated groups or individuals.
Pool ‘A’ will be reserved for SMEP DTM directors, employees and the National Council of Churches of Kenya (NCCK), the umbrella body made up of 28 member churches and 17 Christian organisations.
Investors in Pool ‘A’ can buy a minimum of 100 shares and a maximum of 2 million shares per applicant.
Pool ‘B’ is reserved for church elders who are allowed to buy a minimum of 100 shares and a maximum of one million shares. Pool ‘C’ is for affiliated members, registered organisations of the NCCK and other potential buyers the micro lender’s management deems eligible. The offer runs until November 30 with Kingdom Securities being its authorised agent.
The DTM’s shares will not be listed on the Nairobi Securities Exchange (NSE), said the Capital Markets Authority (CMA), the industry regulator, after giving the micro-lender the go-ahead to raise the cash.
The shares will, however, be allowed to trade on the over-the-counter (OTC) market to be hosted by Standard Investment Bank, the lead transaction advisor.
