Archive
Equity Bank shareholders approve Uganda Microfinance buyout
Publish Date: Jun 30, 2008
Newvision Archive
  • mail
  • img

By Reuben Olita in Nairobi

SHAREHOLDERS of Equity Bank of Kenya on Friday gave a nod to the bank to acquire the Uganda Microfinance Limited (UML) –one of the leading microfinance companies in Uganda.

The nod effectively allows the take of 100% of the UML’s share capital. The move by the shareholders at the bank’s annual general meeting at Nairobi’s Kenyatta International Conference Centre followed the approval of the deal by the Bank of Uganda early last week.

The Bank of Uganda under the Microfinance Deposit-taking Institutions Act, 2003 granted the acquisition price of Ksh1.66b to be met through an allotment to the current owners of 8.067 million new ordinary shares of the bank at a price of Ksh206 each.

The approval paved way for the Central Bank of Kenya to give its verdict on the ground-breaking cross-border acquisition by Kenya’s leading bank in term’s of market share and customer base.

The shareholders decision was necessitated primarily by the creation of new ordinary shares.

The shareholders gave the green-light based on their assent to the company’s expansion programme announced during a meeting convened last December to approve the injection of capital by its new strategic equity partner, Helios EB.

The deal marks the first time an indigenous Kenyan financial institution has made a 100% acquisition of such magnitude in the region.

UML is the dominant microfinance institution in Uganda, operating profitably with 26 branches and 14 offices.

Dr. James Mwangi, the Equity chief executive officer, said since the massive investment by Helios EB International in 2007, the bank had been actively engaged in looking for opportunities for regional expansion.

“The acquisition of UML was in line with the bank’s expansion strategy, and provided an optimum entry point into the Ugandan market,” Mwangi explained.

Mwangi said the bank envisaged that the current micro-finance business in Uganda was poised for exponential growth.

He disclosed that the plan was to extend UML’s offering into a full-scale commercial bank, subject to approval by the Bank of Uganda.

The acquisition of the UML by Equity comes at a time when the bank has embarked on an ambitious programme to consolidate its current growth by opening new branches in the country, and expanding into the East African region.

Last year, Equity posted an impressive performance, announcing a pre-tax profit of sh2.4b, a 116% increase up from sh1.1b recorded in the same period the previous year.

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
FORMER president Dr. Apollo Milton Obote has been honoured for his distinguished service to Busoga College Mwiri and the nation....
THE Ministry of Health has appealed to religious groups to counsel men to stop having extramarital sex to stem the raising rates of HIV infections....
THE Chinese community in Uganda on Tuesday celebrated their 62nd independence anniversary....
MAKERERE University has sued the National Insurance Corporation (NIC) over a sh16.7b pension savings package it claims the insurance giant owes it....
PRESIDENT Yoweri Museveni will lead the alumni of the University of Dar-es-Salaam in Uganda to a fundraising drive targeting sh1b for the Tanzania-based institution....
THE UPDF officers, dressed in neatly pressed uniforms complete with gleaming black boots, took to the podium, many accompanied by their spouses. Then, they were decorated....
Should workers be subjected to a 4% Health Insurance Tax??
Yes
No
Can't Say
follow us
subscribe to our news letter