Equity Group Holdings Ltd., Kenya’s second-largest bank by market value, will buy a Congolese lender in its first acquisition outside the East African market as it seeks to triple the number of markets it operates in within a decade.
The bank, based in the capital, Nairobi, will buy 79 percent of ProCredit Bank Congo SA, which has total assets of $200 million and a customer base of more than 170,000 small-business customers, Equity Group Chief Executive Officer James Mwangi told reporters Tuesday.
“We have allocated for this project $60 million and that does not mean purchase price only,” Mwangi said, without providing further details about how much it paid for the stake. The acquisition is subject to regulatory approval in the Democratic Republic of Congo and Kenya, he said.
Congo is among 10 new markets Equity Group is targeting in an expansion plan backed by 200 billion shillings ($2.03 billion). In addition to its home market, the lender already operates in Uganda, Tanzania, Rwanda and South Sudan and is targeting countries including Zambia, Ethiopia, Mozambique and Zimbabwe.
ProCredit’s shareholders include the German Development Bank, which holds 12 percent, and the International Finance Corp. with 9 percent. The lender has 15 outlets and plans to add 15 “immediately,” Mwangi said.
Equity is targeting a compound growth rate of 70 percent in its first five years of investing in Congo, he said. Banking penetration rates in the country are currently 19 percent, compared with about 53 percent in Kenya, he said.
“Once we establish ourselves in Congo, going to Mozambique, Zambia, Zimbabwe, Malawi and Angola will just be an extension,” Mwangi said. “We could not have put together a better springboard for going to southern Africa.”