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Credit Bank Sh1 billion deal with Dutch PE fund stalls

Credit Bank chief executive Betty Korir
Credit Bank chief executive Betty Korir. FILE PHOTO | NMG 

The Sh1 billion deal between private equity firm Oikocredit International and Credit Bank appears to have collapsed almost a year after the two institutions started negotiations.

Dutch private equity fund Oikocredit last year announced a plan to take 22.8 percent stake in Credit Bank for Sh1 billion.

“Oikocredit and Credit Bank were confident that they would come to a final agreement and disbursement. However, in late 2019, the deal was not pursued further,” Ulrike Haug, communications manager of Oikocredit told the Business Daily last week.

Although the firm said it was not at liberty to disclose information on why the deal was not finalised, it said “in general international finance arrangements are complex by nature and at times result in unforeseen outcomes. We confirm that the fate of the deal is not related to the allegations against the bank’s CEO recently published in Kenyan media,” Oikocredit said in response to media queries.

Last month, Credit Bank chief executive Betty Korir was summoned to the Directorate of Criminal Investigations to provide more information on a financial deal involving Sh200 million after an anonymous whistle-blower associated the deal to money laundering.

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The two institutions signed a non-binding term sheet for an equity investment in August 2019, after which they announced the anticipated equity investment via a joint press release in which the social impact investor was to provide a Sh1 billion equity investment.

Following delayed conclusion of the deal, the bank has been holding discussions with various investors as it seeks capital injection so that to sustain its growth.

Credit Bank is a privately owned lender whose majority shareholder is former Finance minister Simeon Nyachae.

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