Faulu Bank receives Ksh1.45 billion capital boost to fund growth and expansion

Leading Microfinance Bank Faulu has received a Ksh1.45 billion capital injection from parent company Old Mutual Africa Holdings Limited to support its growth strategy hinged on growing its banking business and customer base.   

Faulu, the leading Microfinance Bank is banking on small and medium enterprises (SMEs) and business groups which account for the bigger chunk of its customer base, to grow revenue and expand in the counties as the economy gradually picks momentum after the Covid-19 disruption. 

The capital boost also comes as the Bank, which is part of UAP Old Mutual Group, scales up financial support and solutions to microenterprises and business groups comprising over 150,000 customers. 

The UAP Old Mutual Group Chief Executive Officer, East Africa, Arthur Oginga says the additional capital will be deployed in strengthening the Bank’s balance sheet as it offers a full array of financial solutions and expands its footprint across the country. 

“Our growth strategy is focused on addressing the unique financial needs of small businesses forming the bulk of our customer base. This requires resources hence the support we have received from Old Mutual Africa Holdings Limited will be able to sustainably accelerate Faulu’s business objectives,” said, Mr. Arthur Oginga.

In February, Faulu stepped up support to micro, small and medium enterprises (MSMEs) and business groups to help them recover from the impact of the pandemic. This includes trade finance solutions to larger SMEs in construction, trade, agribusiness and import business.

“With many of our customers struggling to rebuild their businesses in a challenging environment, our primary focus as a Bank is on unlocking opportunities through trade finance under flexible terms. This will be achieved through the banks strategic partners including the county governments, companies in the automotive industry, agribusiness as well as the local community, said Faulu CEO Mr. Apollo  Njoroge.”

In consideration of the current market trends and consumer transactional behavior the digital revolution has bequeathed us with the sense of innovation that has transformed conventional banking. In view of the afore mentioned the bank has also invested in the digital transformation journey and forecasts the digital channels contributing a great deal in convenient and exceptional banking service delivery while reducing the cost to income ratio.

Faulu Microfinance Bank has strategically aligned its business model to provide a wide range and accessible financial services through its branch network of 545 Agencies, over 61 branches, Faulu Mobile banking through the *339# Faulu ATMs and through any Visa enabled ATMs countrywide.

Faulu is also merging some branches following a strategic review of its operations to improve efficiency. The Bank recently merged its Mwea and Maua branches with the Embu and Meru branches respectively, a move it said was geared to improve efficiency and deliver a better service experience to its customers. Faulu also consolidated its Njoro marketing office with the Nakuru branch, and the Taveta marketing office is now part of the Voi branch. 

“We are consolidating our business to optimize operational and cost efficiencies, while leveraging alternate channels like mobile banking and huge agency network Agency banking in line with emerging market trends and customer dynamics,” said the Faulu Bank CEO.  

According to Think Business latest banking survey, Faulu is the leading Microfinance Bank in Kenya with a deposit book and a loan book of Kshs.23 Billion and Kshs.19.5Billion respectively. The bank prides itself having positively economically impacted on millions of customers directly and indirectly. The bank is regulated by the Central Bank of Kenya and offers a variety of financial solutions catering for both Retail and MSME segments.