Sidian Bank receives Sh1.2bn capital boost from Danish fund
Latest funding comes on the back of shareholders approving and additional Sh1.5 billion capital raise in February last year that saw Centum Investment Company Inject in Sh1.1 billion. The fresh capital from the Investment Fund for Developing Countries (IFU) will be used to grow SME loan book, trade finance portfolio and mobile lending
Sidian Bank has received $12 million (Sh1.2 billion) tier II capital injection from a Danish development finance institution (DFI) to firm up its regulatory capital ratios and support lending. The fresh capital from the Investment Fund for Developing Countries (IFU) will be used to grow SME loan book, trade finance portfolio and mobile lending, according to Sidian bank chairman James Mworia. “This is a major vote of confidence in Sidian Bank and its strategic initiatives by an institutional investor with significant investments in financial services companies across the globe,” said Mr Mworia.
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“The funding will be utilised in supporting the bank’s growth in risk assets, including the loan book, building on the bank’s demonstrated success in utilisation of previously raised capital.” Latest funding comes on the back of shareholders approving and additional Sh1.5 billion capital raise in February last year that saw Centum Investment Company Inject in Sh1.1 billion. Centum acquired majority stake in the bank in November 2014.IFU Vice President Morten Elkjaer said the deal is the first investment in financial services sector and deepens the fund’s presence in Kenya.
“We believe this will help increase access to finance that can spur growth of SMEs and contribute to sustainable development and jobs in Kenya by providing effective and timely financial services,” said Mr Elkjaer.IFU is a self-governing state fund with the purpose of promoting economic and social development in developing countries. Its head office is in Copenhagen (Denmark) and is backed by regional offices in Asia, Africa, Latin America and Central and Eastern Europe.Sidian CEO Chege Thumbi expects the investment to boost liquidity position of the bank offering ease of access to funding, financial backing and fast turn-around times for SME customers.“We anticipate that the investment by IFU will therefore drive improved performance of the bank profitably.