Bottom-tier Jamii Bora Bank plans to raise Sh500 million in additional capital through a private placement by end of the month. The cash call is part of approval by shareholders during annual general meeting in April to increase the banks nominal capital by Sh5 billion through a combination of a rights issue, convertible debt and strategic investors.
“We expect to raise Sh500 million, as part of our efforts to strengthen our capital base to support business growth,” said the bank’s chief executive Sam Kimani. “Part of the proceeds will also be invested in the new subsidiary, Jamii Bora Leasing Ltd.”
He added that the increase will give them capacity to grow their loan book and increase customer deposits while meeting statutory ratios.
Three major shareholders of the bank have committed to take up over 55 per cent of the rights, Jamii Bora said. They include Catalyst Fund , managed by Catalyst Principal Partners LLC, Cornerstone Enterprises and Asterisks Holdings Ltd.
During the AGM, shareholders approved the creation of 30 million new ordinary shares and mandated the board of directors to increase paid up capital to the desired level within a five-year period.