Djiboutis Saalam Bank acquires Uwezo microfinance

Saalam Africa Bank (SAB) has completed the acquisition of Uwezo Microfinance bank following approvals by the National Treasury and the Central Bank of Kenya (CBK).

The Djibouti domiciled Islamic lender takes a 100 per cent stake in the micro-bank with the effective date of the acquisition being backdated to March 25.

SAB, established in 2007 has a share of nearly one third of all bank accounts in Djibouti along with the highest number of branches and ATMs in the country.

The lender also has a representative office in Ethiopia and has had presence in Kenya through an investment bank license by the Capital Markets Authority (CMA).

On its part, Uwezo was licensed in November 2010 as a community microfinance bank carrying out business in Nairobi’s Starehe Area. In December 2015, the small lender was granted nationwide status.

The bank has a market share of 0.45 per cent and is ranked 10 out of 14 micro-banks with one branch in Nairobi as of March 31.

According to CBK’s latest banking sector report, Uwezo MFB had an asset base of Ksh.336 million at the end of 2019 with customer deposits at Ksh.256 million.

CBK has welcomed the transaction terming it as a strength to the business model of Uwezo and a mark of resilience for the small lending section of the banking industry.

The transaction is the latest merger and acquisition (M&As) action in the MFB space.

Earlier this year, the Competition Authority of Kenya (CAK) approved the capture of a majority stake in Century MFB by mobile lender Branch International.