MICROCAPITAL BRIEF: Small and Micro Enterprise Programme (SMEP) Deposit Taking Microfinance Institution of Kenya Looking to Raise $18.5m in Share Capital

Small and Micro Enterprise Programme (SMEP), a deposit-taking microfinance institution (MFI) in Kenya, is looking to raise KES 1.6 billion (USD 18.5 million) in share capital for expansion. The only investors eligible for this offer are members of the National Council of Churches of Kenya (NCCK), a countrywide network of Christian communions and other institutions that now owns 100 percent of SMEP shares, as well as SMEP employees and customers.SMEP will offer approximately 145 million new shares at KES 11 (USD 0.12) each. According to SMEP Chairman Gabriel Kivuti, these shares constitute a 68-percent shareholding of the MFI. This offer was approved by the Capital Markets Authority, the applicable regulating body in Kenya on October 11, 2012.

SMEP intends to use the additional funding to decrease its dependency on debt to finance its operations. Additionally, a portion of this capital will be used to build a new head office building in Nairobi and to upgrade its network of branches within the country. SMEP Chief Executive Officer Phyllis Mbungu states that part of the funds also will be invested in information and communications technology to supports the development of new products.

Established in 1913, NCCK comprises 26 member churches and 17 other Christian organizations dedicated to promoting religious activities. SMEP, which is based in Nairobi, was registered as an MFI in 1999. As of 2011, it reports total assets of USD 23.5 million, a gross loan portfolio of USD 18 million with 53,139 active borrowers, return on assets (ROA) of 0.84 percent and return on equity (ROE) of 6.51 percent. As of the same period, it also reports USD 9.6 million in deposits from 127,427 borrowers.

By Sarah Benali, Research Associate

About Small and Micro Enterprise Programme (SMEP)
The Small and Micro Enterprise Programme (SMEP) began as a relief program in Nairobi, Kenya in 1975. In 1999, it became registered as a microfinance institution (MFI). SMEP has 6 branches and 35 marketing units throughout Kenya as of 2012. As of 2011, SMEP reports total assets of USD 23.5 million, a gross loan portfolio of USD 18 million with 53,139 active borrowers, return on assets (ROA) of 0.84 percent and return on equity (ROE) of 6.51 percent. As of the same period, it also reports USD 9.6 million in deposits from 127,427 borrowers.

Sources and Additional Resources

SMEP DTM Press Release: “SMEP DTM Launches Sh1.6 billion share sale,” October 2012,http://www.smep.co.ke/news/95-smep-dtm-launches-sh16-billion-share-sale-.html

MicroCapital.org Story: “MICROCAPITAL BRIEF: Small and Micro Enterprise Programme (SMEP) of Kenya Licensed to Take Deposits,” December 29, 2010, https://www.microcapital.org/microcapital-brief-small-and-micro-enterprise-programme-smep-of-kenya-licensed-to-take-deposits/

MicroCapital Universe Profile: SMEP
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SMEP

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