Old Mutual, an insurance and banking institution, reportedly has received regulatory approval to purchase a majority stake in Faulu Kenya, a deposit-taking microfinance company. This concludes Faulu Kenya’s two-year process to sell its stock to six investors. The deal was agreed upon in July 2013 but was contingent upon receiving regulatory approval from the Financial Services Board of South Africa and the Central Bank of Kenya. Further information on the transaction and Faulu Kenya’s other investors is not available.
According to the US-based nonprofit data provider Microfinance Information Exchange (MIX), as of December 2013 Faulu Kenya had USD 89 million in total assets, a gross loan portfolio of USD 63 million outstanding to 78,000 active borrowers, USD 55 million in total deposits from 268,000 depositors, return on assets (ROA) of 2.38 percent and return on equity (ROE) of 27.5 percent. As of December 2012, Old Mutual manages funds amounting to GBP 262 billion (USD 403 billion) and serves 14 million customers in approximately 20 countries.
By Megan McGowan, Research Associate
About Faulu Kenya:
Faulu Kenya was founded in 1992 as a pilot microlending program of Food for the Hungry International (FHI), a US-based relief and development organization. In 1999 it spun off into a limited liability company 70-percent owned by FHI. According to the US-based Microfinance Information Exchange (MIX), Faulu Kenya had a gross loan portfolio of USD 63 million outstanding to 78,000 active borrowers, USD 55 million in total deposits from 268,000 depositors, return on assets (ROA) of 2.38 percent and return on equity (ROE) of 27.5 percent as of year-end 2012.
About Old Mutual Group:
Founded in 1845 and based in London, England, Old Mutual Group offers savings, insurance and investment services. Old Mutual specializes in three business areas: (1) wealth and short-term insurance in emerging markets; (2) asset management in the United States; and (3) banking in South Africa. As of December 2012, Old Mutual manages funds amounting to GBP 262 billion (USD 403 billion) and serves 14 million customers in approximately 20 countries.
Sources and Additional Resources
[1] Old Mutual Press Release: “Old Mutual Africa – Update on Acquisition of Majority Stake in Faulu Kenya,” http://www.oldmutual.com/media/news/viewNews.jsp?newsId=22646
MicroCapital: “Old Mutual Group (OM) Acquires Microfinance Company Faulu Kenya,” July 17, 2013, https://www.microcapital.org/microcapital-brief-old-mutual-group-om-acquires-microfinance-company-faulu-kenya/
MicroCapital: “Faulu Kenya, Airtel Form Partnership to Offer Mobile Credit,” May 19, 2012, https://www.microcapital.org/microcapital-brief-faulu-kenya-airtel-form-partnership-to-offer-mobile-credit/
MicroCapital Universe Profile: Faulu Kenya, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Faulu+Kenya
MicroCapital Universe Profile: Old Mutual South Africa
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Old+Mutual+South+Africa+%28OMSA%29
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