NAIROBI, Kenya, May 26 – Equity Group Holdings Limited has announced its entry to the Democratic Republic of Congo (DRC) through acquisition of 79 percent of German owned international bank, ProCredit Bank Congo.
Group CEO James Mwangi says the proposed acquisition will cost the company Sh6billion to acquire the bank which has over 170,000 customers at the moment.
However the completion of the transaction is subject to regulatory approval in Kenya and the Democratic Republic of Congo.
“We have found a bank with a better quality in a more challenging environment. This is a bank that has focused on SMEs and that is what constitutes 70 percent of Equity Bank assets. So the risks is quite low,” Mwangi said during a media briefing on Tuesday.
Other shareholders will be German Development Bank (KfW) at 12 percent and the International Finance Corporation (IFC) 9 percent.
Mwangi said the proposed acquisition of ProCredit provides Equity Group a great platform to further its growth objectives while extending its mission of financial inclusion across Africa.
“We are excited about our entry into Sub Sahara Africa’s third most populous country through the investment in a fast growing, well established and highly regarded Bank. We see enormous scope for development in the DRC and, together with the well trained and dedicated team of staff at ProCredit Bank, we look forward to actualizing the great ambitions we share for the DRC market” he said.
The 79 percent stake was earlier held by ProCredit Holding (PCH) at 61 percent and the remaining by Belgian investment giant, BIO and Stichting DOEN (DOEN).
Started in 2005, the bank is the seventh largest bank in terms of assets in the market with total assets exceeding Sh19.6billion (US$ 200million), net assets of Sh2.4billion (US$ 25million) and a customer base of over 170,000.
Equity is expected to start with 15 branches which belonged to ProCredit Bank Congo and which are in three provinces, with plans to leverage on mobile banking products for more customer reach. At the moment, DR Congo has a penetration of 44percent in terms of mobile phones.
Once the transaction is complete, this will be the sixth subsidiary of Equity Group Holdings Limited from Kenya, Tanzania, Uganda, Rwanda and South Sudan.
“ProCredit Holding, DOEN and BIO are proud to have built ProCredit Bank Congo since its foundation in 2005. ProCredit Bank has played a pioneering role in serving small and medium-sized enterprises and bringing banking services to DRC in general and the SME sector in particular,” said Helen Alexander, Manager at ProCredit Holding.
Equity Group was advised by Equity Investment Bank as the transaction advisor while Anjarwalla & Khanna acted as the legal counsel.