Kenya: K-Rep Bank Gets a Sh1b (USD 12.6 ml) Capital Boost

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Nov 2008
Nairobi, Kenya, November, 27 2008 - Major shareholders of K-Rep have pumped an additional Sh1 billion capital into the bank.

The move comes just after Parliament passed the Finance Bill requiring banks and mortgage finance companies to increase their minimum core capital from the current Sh250 million to Sh1 billion over the next four years.

The fresh capital injection brings the bank’s core capital to a massive Sh1.8 billion.The bankwill use the additional capital to develop its infrastructure and diversify into new products.

"The huge financial injection from our shareholders is a clear indication of the confidence, commitment and the potential of the country’s micro finance sector," said Kimanthi Mutua, the managing director.

"The growth potential in the microfinance sector is big, considering that still only a small percentage of the bankable population has access to suitable financial services," said Mr Mutua.

The bank’s principal shareholders include among others International Finance Corporation (IFC), African Development Bank (ADB), ShoreCap International, Stichting Triodos Doen, K-Rep Group and Centum Investments. In a statement yesterday Mutua said the bank would continue focusing on the micro finance sector, whilst providing banking and financial services to all Kenyans.

He said post-election skirmishes earlier and huge expenditures on infrastructure development would affect the bank’s profitability this year.

Upbeat

According to the unaudited results for the third quarter period ended September 30, this year, the bank suffered a huge after tax loss amounting to Sh210 million fuelled mainly by increased loan loss provisions related to customers whose businesses were affected by post-election chaos.

The majority of K-Rep clients are low-income entrepreneurs located in neighbourhoods that were badly affected by the post-election skirmishes. The bank is upbeat many of its customers would recover and maintain their relationship with the bank.



Source : The Standard
 

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