Branch mobile loan app buys Kenyan bank
The popular mobile lending app “Branch” has received regulatory approval to buy controlling shares in Century Microfinance Bank Limited.
A notice in the Official Gazette dated Friday, May 7, stated that Branch International Limited had been authorized to take 84.89% of the issued share capital in Century Microfinance Bank Limited.
“In accordance with the provisions of Article 46 (6) of the 2010 Competition Law, it is notified for general information that, in the exercise of the powers conferred by the Competition Law, the Autorité de the competition has authorized the proposed transaction as stated ”reads an extract from the Gazette’s opinion.
A 2018 image of young Kenyans reading a phone.
One of the conditions is that the acquirer and the target each maintain the terms agreed with the borrowers for all loans in their loan portfolio at the time of acquisition.
In addition, the Acquirer and the Target will each keep their existing performing and non-performing loans in accordance with their terms until such loans expire as long as said terms do not contravene the provisions of Competition Law No. 12. from 2010.
This is a strategic shift towards the formal lending sector. The move came a month after parliament approved a bill to regulate mobile loan rates and the treatment of delinquent loans to protect borrowers from predatory lending.
Branch is one of the most popular apps in Kenya on the Google Play Store, while Century Microfinance Bank is a microfinance institution specializing in providing financial services to micro, small and medium enterprises. Century Microfinance Bank was licensed by the Central Bank of Kenya as a depository microfinance institution in 2012 to provide a full range of financial services such as savings accounts and credit facilities.
The Central Bank of Kenya (CBK) currently regulates banks and micro-lenders.
The proposed changes give it supervisory and licensing powers to oversee hundreds of digital lenders operating in the country.
“The proposed amendment aims to achieve the following objectives, prohibiting any person, institution or business from lending money to Kenyans without authorization from the Central Bank of Kenya,” said a notice from Gideon Keter.
Central Bank of Kenya Governor Patrick Njoroge at a press conference following the Monetary Policy Committee meeting which reviewed the outcome of its policy decisions and recent economic developments on January 28, 2020.