News Column

Old Mutual Replaces Faulu MD As It Repositions for Loan Market

August 13, 2014

Constant Munda

OLD MUTUAL, the majority shareholder in second largest deposit taking microfinancier Faulu Kenya, has replaced the long serving managing director John Mwara with an insider Charles Njuguna in an acting capacity.

The moves is a clear pointer of the firm's intention to play a key role in the lending business.

The acquisition of 67 per cent stake in Faulu for a reported Sh3.6 billion with immediate injection of Sh2.8 billion in April allowed Old Mutual to join the rewarding loan market fray.

Over the last couple of months, it has been running an aggressive advertising campaign for its credit facilities.

Although the London and Johannesburg-listed group is strong in banking in some overseas markets it operates in, its success in Kenya has been in life assurance and asset management.

The giant financial services group with roots in South Africa said Mwara has retired after eight years of service following a" mutual agreement"

It said in a statement the outgoing chief has been engaging the board on maximising and enhancing benefits of the integration between the two companies after they got regulatory approval last December.

Board chairman Peter Muthoka, formerly chair of largest lender KCB until May 2012, said Mwara's services have been "invaluable in growing Faulu into a leading microfinance bank".

Established in 1991 in Mathare slum as a loan scheme, the 400,000 - customer Faulu has a presence in 44 of the 47 counties with 110 service outlets including 34 branches having obtained a DTM licence in May 2009.

Chief operations officer for Africa Tavaziva Madzinga said Old Mutual's holding would propel growth in Kenya's business through bancassurance.

"This deal confirms Old Mutual's commitment of availing affordable insurance products to millions of Kenyans through strategic partners like Faulu whose fast expanding branch network creates an excellent distribution channel," Madzinga said in a statement.

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Source: AllAfrica

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