While Moniepoint’s acquisition of 78% of the Nairobi-based financial institution has been approved by the Competition Authority of Kenya (CAK), the deal is yet to be finalized.
In a statement shared with Techpoint Africa, Moniepoint noted that “regulatory approval has been received from the Competition Authority of Kenya for a potential transaction with Sumac Microfinance Bank. Further updates will be given as appropriate.”
“According to the parties’ submissions, the transaction will not result in negative public interest issues. Specifically, there will be no employment loss and all current employees will be retained under current terms,” the CAK statement said.
Thisnew development comes five months after Moniepoint’s bid to acquire KopoKopo, a local payments company, failed despite obtaining regulatory approval as well.
Although the reasons for the deal’s fall off is still unknown, it was a surprising setback for one of Africa’s most ambitious fintech companies, which is well-known for its rapid growth throughout the continent.
However, Moniepoint seems to have adjusted its strategy now.
The company is choosing a strategic entry point that is consistent with its primary goal of enabling small companies through digital financial services by focusing on Sumac Microfinance Bank, a very minor player in Kenya’s microfinance market.
Sumac’s history
Established in 2001 as a savings and credit cooperative association Sumac pivoted into a deposit-taking organization in 2012, and now accounts for 4.3% of Kenya’s microfinance banking industry.
It has about 16,000 deposit accounts and KES 3.013 billion ($23 million) in assets as of December 2023.
Moniepoint’s projected expansion into Kenya reflects a larger trend of acquisitions in Africa’s banking industry.
Established banks and fintech companies are increasingly purchasing smaller institutions to speed up their entry into new markets or broaden their product offerings.
Earlier this year, Kenya’s KCB Group paid KSh 2 billion for Riverbank Solutions, while Nigeria’s Access Bank was approved to buy National Bank of Kenya.
