Jamii Bora raises Sh1.2bn in PE deal for SME lending

April 12, 2016

Jamii Bora Bank has raised Sh1.2 billion through an equity investment from two PE firms, with the bank looking to expand its SME lending book.

Equator Capital Partners and Progression Capital Africa Ltd have made the investment jointly, giving them a significant stake in the third-tier lender which is ranked Kenya’s 30th in market share at 0.47 per cent as per latest CBK data.

Although Jamii Bora did not disclose the size of stake taken up by the new investors, sources said that the bank has created additional shares to accommodate the new investors. None of the existing shareholders have sold their stakes as a result of the new investment.

Equator Capital typically invests between $3 million (Sh300 million) and $12 million (Sh1.2 billion) for an ownership of between five and 25 per cent of a financial institution.

Progression Capital’s investment criteria see it put in between $2 million (Sh200 million) and $8 million (Sh800 million) for what it terms significant minority stakes and full board participation rights.

“Their investment will support us as we further expand our reach to underserved SMEs and communities, both rural and urban, all across the country,” Jamii Bora’s CEO Samuel Kimani said in a statement.

The last significant equity movement at Jamii Bora came last year when PE firm Catalyst Principal Partners raised its stake in the bank to 11 per cent, nearly three times its initial investment.

The increase in Catalyst’s stake saw the lender’s foreign investor owned portion rise to 37 per cent, meaning that the latest round of equity sale could have pushed it beyond the 40 per cent mark going by the investment criteria of the two new PE investors.

Catalyst had made its initial investment in the bank through a rights issue in December 2014, where it bought a 4.4 per cent stake.

Last year, it bought more Jamii Bora shares through the over-the-counter (OTC) market, consequently getting a seat on board.
Other large investors in Jamii Bora include Scandinavia AB and Nordic Microcap. Source: Business Daily Africa