Corporate News
Real People CEO Daniel Ohonde. He says the firm expects to raise between
Sh1.5 billion and Sh2 billion in the first tranche of its bond expected
to be sold by end of year. PHOTO | DIANA NGILA |
NATION MEDIA GROUP
By OKUTTAH MARK
In Summary
- Real People said it expects to raise between Sh1.5 billion and Sh2 billion in the first tranche of the bond, as it seeks to expand its loan book portfolio that it says currently stands at Sh10 billion.
- CEO says unlike the South Africa market where most firms are shying from raising money through the bond market, liquidity in the Kenyan market makes the prospects for uptake positive.
- Real People offers loans of between Sh100,000 and Sh5 million to high-end micro enterprises and low end SMEs at 25 per cent. It has an SME client database of 15,000 and loan disbursements of up to Sh6 billion.
South African microfinancier Real People Investment
Holdings Ltd has tapped NIC Capital as the arranger for a Sh5 billion
bond that it wants to sell to Kenyan investors before end of year.
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Real People, listed on the Johannesburg Stock Exchange
(JSE), said it expects to raise between Sh1.5 billion and Sh2 billion in
the first tranche of the bond, as it seeks to expand its loan book
portfolio that it says currently stands at Sh10 billion.
Daniel Ohonde, CEO of Real People East Africa, said
the firm will seek approval from the Capital Markets Authority in
November with the transaction to be concluded by end of year.
“Currently we have appointed a transaction adviser
for the bond and expect to seek regulatory approval by November,” Mr
Ohonde said in an interview after the signing of a partnership with
Telkom Kenya and HP that will see Real People clients get loan details
via SMS.
Mr Ohonde added that unlike the South Africa market
where most firms are shying from raising money through the bond market,
liquidity in the Kenyan market makes the prospects for uptake positive.
In the past, only multilateral agencies such as the
East African Development Bank, PTA Bank and Shelter Afrique have issued
bonds at the Nairobi Securities Exchange besides Kenyan companies.
Kenyan firms have been using the bond market to support massive projects in recent years.
Britam
recently raised Sh6 billion while UAP is raising Sh2 billion. Both
firms will use part of the proceeds to finance real estate projects.
Housing Finance,
Shelter Afrique – the African Union housing arm – and Centum have also
gone to the bond market for real estate-related projects.
Home Afrika, the only real estate developer listed on the NSE, is also looking to issue a bond by end of year.
Home Afrika, the only real estate developer listed on the NSE, is also looking to issue a bond by end of year.
Expectations that interest rates will drop towards
the end of the year have, however, halted borrowing plans by some firms
such as Housing Finance.
Real People offers loans of between Sh100,000 and
Sh5 million to high-end micro enterprises and low end SMEs at 25 per
cent. It has an SME client database of 15,000 and loan disbursements of
up to Sh6 billion.
“We are mostly interested in expanding our loan
portfolio rather than the physical presence, and by going online, people
can access our loans from wherever they are,” said Mr Ohonde.
Borrowers in Kenya are set to benefit from quicker
loan processing through the computer-aided application procured at a
cost of more than Sh100 million. Customers will now experience a faster
loan approval process of in six hours from the initial two weeks.
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