Money Markets
By JOHN GACHIRI, jgachiri@ke.nationmedia.com
In Summary
- Lender has surpassed Sh1billion minimum core capital set by CBK and fulfilled many other statutory requirements.
- The firm now targets to increase its capital by about 40 per cent in the next six months.
Financial services firm Unaitas’ plan to convert
into a fully-fledged bank has gathered pace with the lender announcing
it had surpassed the Sh1 billion minimum core capital required by
Central Bank of Kenya and fulfilled many statutory requirements.
Unaitas chief executive Tony Mwangi said the Sacco
had hit the Sh1.3 billion mark and now targets to increase its capital
by about 40 per cent in the next six months.
“We intend to grow our core capital from Sh1.3
billion to Sh1.8 billion by end of the year,” said Mr Mwangi at the
launch of Unaitas’ five-year strategic plan (2014-2018) at the
Intercontinental Hotel in Nairobi on Tuesday.
Mr Mwangi was, however, non-committal on whether
the lender would meet this target by asking shareholders to pump in
funds through a rights issue or by capitalising its reserves.
“We are going to achieve that through very
specific activities geared towards fund mobilisation.” During its AGM
earlier in the year, Unaitas announced it had achieved nearly Sh800
million core capital and was targeting Sh1 billion by year end—meaning
investors have injected capital faster than then expected.
The strategic plan seeks to see Unaitas become a
fully-fledged bank within the next four years, during which it plans to
list on the Nairobi Securities Exchange (NSE).
The journey to NSE was kick-started after Unaitas
invited bids in April for consultancy on listing and changing its
capital structure.
The lender has received applications from a
majority of the local investment banks, Mr Mwangi said the tenders will
be opened on June 12.
Unaitas has 150,000 members, 18 branches in five
counties and Sh6 billion in assets. The five-year plan targets to grow
customer numbers by more than four times to 650,000 spread in other
counties in addition to Nairobi, Murang’a, Machakos, Kajiado and Nakuru
where it operates. Last year the Sacco paid shareholders Sh0.90 for
every Sh10 share.
Rapid growth
Corporate finance watchers say the rapid growth
has emanated from providing banking services to members even though it
is not officially a bank.
“Even when Unaitas was Muramati (Sacco), they did
not benchmark themselves against other Saccos but against banks and
resolved to provide customers with an experience similar to one they
would receive at a bank,” said Rina Hicks, head of operations at Faida
Investment Bank.
The bank prepared disclosure documents for Unaitas
in 2012 for approval by the Capital Markets Authority (CMA) after the
regulator stopped the Sacco’s first public capital raising plan in 2010.
Unaitas, then Muramati Sacco, attempted to raise
Sh200 million but CMA stopped the funds drive saying that it breached
capital raising guidelines by making public solicitations without
approval.
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