Century Microfinance Bank Limited acquisition by Branch International, a startup fintech, has received approval from the National Treasury.
In a legal notice dated 24th January 2022 and signed by Treasury CS Ukur Yatani, Branch International Limited has been exempted from provisions of section 19(1) of the Microfinance Act for a period of four years from January 1st 2022 until 31st December 2025 in connection with the acquisition and direct or indirect holding of ordinary shares in Century Microfinance Bank Limited.Section 19, bars any individual from holding more than 25% stake in a microfinance institution.
Branch International, a mobile loans entity, is acquiring a sizeable stake (84.89% of issued share capital) in Century Microfinance Bank- a firm whose balance sheet size is about KSh350 Million.
Applying machine learning, Branch International has created an algorithmic approach to determine credit worthiness via customers’ smartphones.
While this tech-forward approach requires transparency and trust, it also enables a fair, secure and convenient path for customers to build capital and save for the future.
Branch International, a fintech startup that assesses creditworthiness using smartphone data, has more than 3 million customers and more than 15 million loans issued in Kenya, Nigeria, Tanzania, Mexico, and India.
Branch International is working to expand access to credit in countries where the average middle class borrower might not have a credit history or even a bank account.
In April 2021, the Competition Authority authorised the acquisition deal on condition that Branch International and Century Microfinance Bank will each maintain the terms agreed with borrowers in respect of all loans existing in their loan books at the time of the acquisition.
The other condition was that both firms will each retain their existing performing and non-performing loans in accordance to their terms upto and until expiry of such loans so long as the said terms are not in contravention of provisions of the Competition Act No.12 of 2010.