NAIROBI, Kenya Oct 19 – Family Bank has entered into a partnership with a strategic investor in a move that is set to enhance its competitiveness in the industry.
The new investor AfricInvest, is set to inject one billion shillings into the bank to shore up its core capital and give it financial muscle to expand its product offering and increase its market share.
Making the announcement, Family Bank Chairman Titus Muya said AfricInvest will take up two seats in Family Bank\’s board and it is expected to offer additional concessionary loans, management expertise and shore up its corporate governance standards.
"With this additional capital injection and technical expertise, we will focus on redefining our strategy to become more competitive and catering to the needs of our customers," Mr Muya said.
AfricInvest is a Pan African private equity fund manager set up as a joint venture between the Dutch Development Bank (FMO) and Norway\’s Norfund.
The new strategic partner is said to have bought a stake in Family Bank although it was not clear what percentage.
With new partners on board, Family Bank\’s core capital rose to Sh3 billion while assets under management shot up to Sh17 billion.
With the new financial injection, the bank is expected to aggressively go after the low end of the market, which has remained its core customers.
Mr Muya said there was a great opportunity for the bank in the low-end market, which remains underserved especially by big financial institutions.
"What we have is suitable for Kenya right now," he said.
Some of the new products the bank is expected to launch include mortgage facilities and trade financing. The bank is also expected to roll out a new core banking system in the coming weeks to improve the bank\’s efficiency.
Family Bank Chief Executive Peter Kinyanjui said the bank is going to be aggressive, saying it expects to have 10 new branches by the end of 2011 to add to its current 53 outlets.
And as local bank\’s continuously look to take their operations to the East African region, Mr Kinyanjui said it was eying opportunities to take its services to the region.
"With our new investors family bank will increase its capacity to react promptly to economic, regulatory and financial environment," Mr Kinyanjui said.
Established in 1984 as a building society, it upgraded its status to a commercial bank in May 2007 driven mainly by the need to offer a wider range of products and services to its customers.