Sh1b shot in the arm for K Rep

November 26, 2008

, NAIROBI, November 26 – K-Rep bank has announced an increase of in its capital base by Sh1billion following an injection of additional funds from its shareholders.

K-Rep Managing Director Kimanthi Mutua said the bank would use the additional capital to develop new products to diversify and grow its market share, as well as continue developing its infrastructure.

Mr Mutua said the bank would continue focusing on the micro finance sector, while providing banking and financial services to all Kenyans.

“The huge financial injection from our shareholders is a clear indication of the confidence, commitment and the potential of the country’s micro finance sector. The growth potential in the microfinance sector is big, considering that only a small percentage of the bankable population has access to suitable financial services,” said Mr Mutua.

He said the post-election violence that occured earlier in the year and costs associated with infrastructure development had affected the bank’s profitability this year, but was confident that this will be turned around quickly in the coming year.

Un-audited results of up to September 2008 show the bank recorded a loss of Sh209 million compared to an after tax profit of Sh96 million last year  largely occasioned by increased loan loss provisions, directly related to customers whose businesses were adversely affected by the post elections skirmishes.

“The majority of K-Rep clients are low-income entrepreneurs located in neighbourhoods that were badly affected by the post-election skirmishes,” a statement from the bank indicated.

“Despite making these large provisions, the bank has continued to support affected customers and is helping them to reconstruct and rebuild their businesses.”

The bank currently has a network of 29 branches with the latest entrant being the Kenyatta Market branch in Nairobi which services the expansive Kibera area.

The bank’s customer base growth has been steady, now at over 300,000 and in tandem with the increase in products and branch network.

In the past year, the bank invested in new IT system known as Temenos T24 which is ranked one of the top three banking systems in the world.

The new system offers a robust platform for growth and will serve as a platform for rolling out innovative products, such as internet, mobile banking to deepen outreach.

The shareholders of the bank include the International Finance Corporation, The African Development Bank, ShoreCap International, Stichting Triodos Doen, FMO, K-Rep Group, Centum Investments and a number of individuals.

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