Capital Markets

Shelter Afrique assets under management fall Sh13 billion

shelter

Shelter Afrique Chief Finance Officer Kingsley Muwowo. PHOTO | SALATON NJAU

BDgeneric_logo

Summary

  • Nairobi-based pan-African housing financier Shelter Afrique’s assets under management have shrunk by Sh13 billion in four years due to a freeze on new loans and projects.
  • The company’s assets under management declined from Sh32.09 billion ($311 million) recorded in December 2017 to Sh19.09 billion ($174 million) in December 2020.

Nairobi-based pan-African housing financier Shelter Afrique’s assets under management have shrunk by Sh13 billion in four years due to a freeze on new loans and projects amid a restructuring programme.

The company’s assets under management declined from Sh32.09 billion ($311 million) recorded in December 2017 to Sh19.09 billion ($174 million) in December 2020.

The company which is jointly owned by 44 African governments including Kenya, the African Development Bank and African Re-Insurance Corporation, has since in 2017 scaled down its operations following increased debt that saw it almost default in the bond market.

“Between 2017 and 2019, there was no underwriting of new business as the company was undertaking various restructuring schemes pertaining to operations, staffing, new enterprise risk management of work and debt,” Shelter Afrique chief finance officer (CFO) Kingsley Muwowo said.

“Consequently, existing assets under management kept declining in absence of new assets. We only resumed underwriting business in 2020.”

Kenyan projects account for the highest share of Shelter Afrique’s loans portfolio, averaging about 30 per cent of the total.

The company said it resumed lending in 2020 but was forced to reassess loans and pull back some that had been approved due to the Covid-19 pandemic.

It is coming off a restructuring programme, which has seen it reduce its outstanding debt portfolio from Sh32.92 billion ($300 million) in 2019 to $33 million (Sh3.48 billion) by the end of last year.

The funds were owed to eight lenders, development finance institutions, commercial banks, including two capital markets issuances in Kenya and West Africa.