Remu seeks in­vestor nod to raise capital

Business Daily (Kenya) - - MONEY & MARKETS - Brian Ngugi bn­joroge@ke.na­tion­media.com Remu Bank’s share­hold­ers in­clude pri­vate eq­uity and fund man­age­ment firm Fu­sion Capital hall.

Remu Mi­cro­fi­nance Bank plans to raise its au­tho­rised shares 66.67 per cent or by 200 mil­lion units to ac­com­mo­date fu­ture capital rais­ing.

The small-sized mi­cro fi­nance bank (MFB) has asked share­hold­ers to al­low the in­crease from 300 mil­lion shares to five 500 mil­lion at an an­nual gen­eral meet­ing (AGM) sched­uled for Septem­ber 29.

“To in­crease the au­tho­rised share capital of the com­pany from the present Sh300 mil­lion di­vided into 15 mil­lion shares of Sh20 each to Sh500 mil­lion di­vided into 25 mil­lion shares of Sh20 each,” notes the agenda of the AGM.

It is not clear whether it will tap in­vestors through pub­lic is­sue, rights is­sue, pref­er­en­tial shares or pri­vate place­ment ba­sis.

Cen­tral Bank of Kenya (CBK) li­censed Remu as a de­posit-tak­ing mi­cro­fi­nance in 2011 and its share­hold­ers in­clude pri­vate eq­uity and fund man­age­ment firm Fu­sion Capital, which took a 25 per cent stake in 2014.

Remu has branches in Nairobi, Meru and Maua and tar­gets small- and medium-sized en­ter­prises (SMES) and in­di­vid­u­als.it has been loss mak­ing.

There are 13 mi­cro­fi­nance banks reg­is­tered by the CBK. De­posit-tak­ing mi­cro­fi­nance banks sunk deeper into losses last year as fi­nan­cial in­come dropped and de­pos­i­tors flocked to larger com­mer­cial lenders in an­tic­i­pa­tion of ben­e­fits from the rate cap law.

Ac­cord­ing to fresh in­dus­try sta­tis­tics from the CBK, the losses re­flect mi­cro-lenders’ dry­ing in­come streams and a strug­gle to se­cure fresh funds for in­vest­ments.

The com­bined loss be­fore tax­a­tion of the MFBS in­dus­try widened 64.99 per cent to Sh622 mil­lion in the 12 months to last De­cem­ber com­pared with Sh377 mil­lion a year ear­lier.

— FILE

CAPITAL A cus­tomer at a bank­ing

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