Remu Microfinance Bank plans to raise its authorised shares 66.67 per cent or by 200 million units to accommodate future capital raising.
The small-sized micro finance bank (MFB) has asked shareholders to allow the increase from 300 million shares to five 500 million at an annual general meeting (AGM) scheduled for September 29.
“To increase the authorised share capital of the company from the present Sh300 million divided into 15 million shares of Sh20 each to Sh500 million divided into 25 million shares of Sh20 each,” notes the agenda of the AGM.
It is not clear whether it will tap investors through public issue, rights issue, preferential shares or private placement basis.
Central Bank of Kenya (CBK) licensed Remu as a deposit-taking microfinance in 2011 and its shareholders include private equity and fund management firm Fusion Capital, which took a 25 per cent stake in 2014.
Remu has branches in Nairobi, Meru and Maua and targets small- and medium-sized enterprises (SMEs) and individuals.It has been loss making.
There are 13 microfinance banks registered by the CBK. Deposit-taking microfinance banks sunk deeper into losses last year as financial income dropped and depositors flocked to larger commercial lenders in anticipation of benefits from the rate cap law.
According to fresh industry statistics from the CBK, the losses reflect micro-lenders’ drying income streams and a struggle to secure fresh funds for investments.
The combined loss before taxation of the MFBs industry widened 64.99 per cent to Sh622 million in the 12 months to last December compared with Sh377 million a year earlier.