Family Bank to raise Ksh.8 billion from debt market

Mid-tier lender Family Bank is expected to raise Ksh.8 billion in new capital from the commercial debt market as it moves to strengthen its funding.

The bank has received requisite approval from the Capital Markets Authority (CMA) to raise the funds through a multi-currency Medium Term Note (MTN).

The lender is expected to raise an initial Ksh.4 billion tranche before mobilizing the balance within the next five years.

Family Bank Chief Executive Officer Rebecca Mbithi says proceeds from the issue will be deployed towards anchoring lending to small and medium enterprises (MSMEs) and financing the upgrade of the lender’s infrastructure.

“We are positioning the Bank for the second phase of growth as per our 2020 – 2024 strategy anchored on growth and stability of the bank. Through this capital raising, the Bank is eyeing to strengthen its capital base to support lending to micro, small and medium-sized enterprises and heavily invest in technology infrastructure while diversifying our product and market offerings,” she said.

The bank has engaged NCBA Investment Bank and Genghis Capital as its transaction advisors for the debt issue.

The new corporate debt issue comes just under two months after its redemption of a 5.5 years MTN worth Ksh.2 billion in April.

The new issue, to be listed on the Nairobi Securities Exchange (NSE) is expected to replenish the corporate bonds segment in the bourse which has marked a dry spell in recent years.