Unaitas boosts share capital ahead of change to bank
Unaitas Chief executive officer Tony Mwangi. He said the SMEs lender will list in the Nairobi bourse in 2018. PHOTO | FILE
What you need to know:
Unaitas Sacco has raised its share capital to Sh1.44 billion in 2014 from Sh693 million a year earlier.
The sacco, whose membership has increased 43 per cent to 200,000 over the same period, plans to become a commercial bank by mid next year.
Unaitas' revenue reserves stood at Sh461.8 million in 2014 from Sh316.9 million a year earlier, a 32 per cent increase.
Financial services firm Unaitas doubled its share capital in 2014 following strong demand for its shares by investors who are racing to be in the lender’s register before its conversion into a fully-fledged bank.
The sacco plans to become a commercial bank by mid next year.
Unaitas Sacco’s total share capital increased to Sh1.44 billion in 2014 from Sh693 million a year earlier as a result of an aggressive membership recruitment drive that has resulted in members increasing by 43 per cent to 200,000 from 140,000 over the same period.
Unaitas chairman Joseph Kabugu said that the lender’s new members are mostly small businesses and resident farmers in the Nairobi region. The recruitment was made easier after the it moved its headquarters to Nairobi.
“We were targeting the mass population and that is why we moved our headquarters to Nairobi from Murang’a,” Mr Kabugu told the Business Daily.
The over-100 per cent increase in the share capital is the biggest in the lender’s 22-year history and comes as the organisation undergoes capital restructuring that will later see it list on the Nairobi Securities Exchange (NSE).
The conversion date is however dependent on regulatory approval from the Sacco Societies Regulatory Authority (Sasra), the Central Bank of Kenya (CBK), the Competition Authority of Kenya and the Commissioner of Co-operatives.
Unaitas chief executive Tony Mwangi said the lender has been increasing its reserves in preparation for the conversion and listing on the NSE which is expected to happen in 2018. Revenue reserves stood at Sh461.8 million in 2014 from Sh316.9 million a year earlier, a 32 per cent increase.
“We are increasing our appropriations account to give us a strong buffer,” Mr Mwangi told the Business Daily.
Mr Mwangi added that Unaitas is also using CBK prudential guidelines as well as those given by Sasra. Analysts say that the Sacco should not find it hard to enter the banking market since the lender already has a customer base.
Faith Mwangi, a research analysts at Standard Investment Bank, said that Unaitas and its peer Mwalimu National Sacco, which is also planning entry into banking, have customers and operate niche markets that are profitable.
“The trend that has proven to be successful is niche banking.”
Ms Mwangi added that the supermarket model is proving difficult for larger banks. Mwalimu National Sacco on its part has been trying to buy a 51 per cent stake in Equatorial Commercial Bank but the deal has however hit a snag due to regulatory issues.
Unaitas mostly targets entrepreneurs running small businesses and individuals borrowing small amounts with average loans ranging from Sh10,000 to Sh200,000 for micro and SMEs.
In 2014, loans and advances to customers stood at Sh4.85 billion, a 33 per cent increase from Sh3.64 billion a year earlier.
Net profits growth was however modest and stood at Sh258.56 million in 2014 from Sh246.66 million, a five per cent increase.
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