Capital Markets

Maisha Microfinance sale of majority stake gets CAK nod


Ireneus Gichana is the Chief Executive of Maisha microfinance Bank. FILE PHOTO | POOL

Loss-making Maisha Microfinance Bank is set to sell a majority stake to an investment firm at an undisclosed amount, deepening disposal deals by the microlenders in Kenya.

The Competition Authority of Kenya has approved the acquisition of a 55.8 percent stake in the institution by Cactus Cantina Investments Limited. Maisha closed 2021 with a loss of Sh178 million.

“It is notified for general information that in the exercise of the powers conferred upon the Competition Authority of Kenya by section 46 (6) (a) (ii) of the Competition Act, the Competition Authority of Kenya has authorized the proposed transaction,” said the CAK in a gazette notice.

Read: Microlender eyes long-term deposits with higher rate

Maisha Microfinance Bank was licensed by the Central Bank of Kenya on May 21, 2016, but has struggled to post profits and will now join the growing list of micro financiers that have been acquired in the recent past.

At least five out of the 14 CBK-licensed microfinance banks had been acquired or were in the process of being acquired by the end of last year as they struggled with losses and thin capital bases.

Key Microfinance, formerly Remu, last year completed a deal that saw LOLC Mauritius, a firm that is wholly owned by LOLC Holdings —a Sri Lankan firm— pay Sh237.41 million to acquire a 73.29 percent stake.

Century Microfinance Bank was also given the green light to sell an 84.89 percent stake to Branch International Ltd, a San Francisco, California-headquartered financial technology firm, for Sh230 million.

Kajiado-based Choice MFB started by Kenyans abroad, last year also ceded an 85 percent stake to Wakanda Network Ltd – incorporated in London.

Uwezo, another microlender, was in May 2021 fully acquired by Salaam African Bank — a Djibouti lender.

Read: Microfinance banks' pre-tax losses cut to Sh877 million

SMEP Microfinance, in 2020, said it was seeking a strategic investor to buy an undisclosed stake in the business.

The Microfinance Act, of 2006 does not allow a single person or institution to hold more than a 25 percent stake in a microfinance firm but the Treasury has been granting four-year exemptions and therefore speeding up the deals.

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