Branch International Inc, a fintech startup that assesses creditworthiness using smartphone data, has received regulator approval to acquire an 84.89% stake in Century Microfinance Bank Limited.
The Competition Authority in a Gazette notice authorized the proposed transaction.
However, the transaction is on condition that Branch and Century Microfinance Bank will each maintain the terms agreed with the borrowers in respect of all loans existing in their loan books at the time of the acquisition.
“The Acquirer and the Target will each retain their existing performing and non-performing loans in accordance with their terms up to and until the expiry of such loans so long as the said terms are not in contravention of the provisions of the Competition Act No.12 of 2010,” said Wang’ombe Kariuki Director-General, CA.
Branch operations in East Africa are handled by Dan Karuga who acts as Managing Director. The fintech company has more than 3 million customers and more than 15 million loans issued in Kenya, Nigeria, Tanzania, Mexico, and India.
In Kenya, the central bank seeks amendments to the Central Bank of Kenya (Amendment) Bill, 2020 to protect customers from unregulated mobile lenders.
“The principal object of this Bill is to amend the Central Bank of Kenya Act to provide for licensing of digital credit service providers, who are not regulated under any other law. The current position is that there is no legal framework governing digital borrowing platforms. As such, the Central Bank of Kenya will have an obligation of ensuring that there is a fair and non-discriminatory marketplace for access to credit,” reads the proposal.
“Any person who before coming into force of this was in the business of offering credit facilities or loan services through a digital channel and is not regulated under any other law shall register with The Bank (CBK) within six months of coming into force of this Act,” says the Bill tabled in Parliament by Gladys Wanga in her capacity as chair of the Committee on Finance and National Planning.
Century Microfinance Bank provides financial services to micro, small and medium businesses at large.
It was licenced by the Central Bank of Kenya as a deposit-taking microfinance institution on 19th September 2012 to provide a full range of financial services such as savings account and credit facilities.
It currently has over 26,000 clients.