The strategic partnership will now enable Old Mutual to gain strong muscle in the micro-finance segment in the country that remains a growth area for banks and insurance companies.
The deal concludes a two-year divestiture process that has seen Faulu engage with over 20 potential financial partners, subsequently narrowing down to six suitable local and international institutional investors.
From humble roots as a loan scheme in 1991, Faulu became the first microfinance institution to be licensed by Central Bank of Kenya (CBK) in May 2009 as a Deposit-Taking Microfinance institution.
Previously it was largely depending on donors and commercial institutions to support its loan book.
The DTM has a distribution foot-print spanning over 100 outlets and offering both credit and Savings products.
“We are delighted to have found a partner who shares our vision and commitment of being a financial bridge to success for Kenyans and believe that this partnership gives our more than 400,000 clients access to affordable insurance services through Old Mutual’s wide range of products,” Faulu Managing Director, John Mwaura said.
Old Mutual on the other hand provides life assurance, asset management, banking and general insurance to more than 14 million customers in Africa, the Americas, Asia and Europe.
Through its Asset Management arm, Old Mutual in Kenya has close to Sh90 billion of assets under management and continues to grow its Old Mutual Life Assurance Company which has assets of over Sh10 billion.
“This marks yet another milestone in our East Africa growth story. I would like to commend the teams for demonstrating patience and diligence throughout this long but necessary process that will deliver significant mileage in our efforts to expand our distribution and product proposition to Kenyans,” Old Mutual Africa Managing Director Johannes Gawaxab noted.
“This deal further demonstrates how committed we are to growing our business in Kenya and indeed the larger East Africa region. We are pleased that all regulatory approvals have been received and look forward to offering Kenyans a one stop financial shop,” Old Mutual Kenya Managing Director, Rueben Java added.