HARARE, March 29 (The Source) – Microcred Group and AfricInvest Financial Sector Fund have agreed a deal to acquire MicroKing Finance (MicroKing), a micro lending subsidiary of AfrAsia Zimbabwe Holdings Limited, the French firm said on Tuesday.
The deal, which is pending regulatory approval, will see Microcred acquire 70 percent of MicroKing’s issued share capital with AfricInvest taking up the remaining 30 percent.
Microcred has operations in six other African countries — Nigeria, Mali, Ivory Coast, Madagascar, Senegal and Tunisia as well as in China — while AfricInvest is a pan-African private equity fund manager.
The two investors said they believe that MicroKing remains a strong brand with a good staff base and will provide multifaceted support to MicroKing to ensure its long-term growth and competitiveness.
“We are very excited to support MicroKing and the work carried out by its team those last few years. We wish to make a useful contribution to the development of financial inclusion in Zimbabwe and thus, support a dynamic and entrepreneurial population,” said Arnaud Ventura, Microcred Group’s chief executive in a statement.
MicroKing was put up for sale when Mauritius-based AfrAsia Bank (ABL) Limited exited the country in February last year, leading to the liquidation of its local banking unit and asset manager AfrAsia Capital Management (ACM). It was established in 2001 and now has a wide footprint across Zimbabwe.
Julius Tichelaar, Senior Manager at AfricInvest, said: “AfricInvest is proud to partner with one of the leading providers of financial services on the continent and to further strengthen the AfricInvest footprint in Zimbabwe.”
“AfricInvest will provide support in the transformation to bring MicroKing back to its position of a leading provider of financial services to entrepreneurs and to make it a catalyst for further financial inclusion in the country.”
AfricInvest said it will follow in the recapitalization plan post investment. MicroKing is expected to undergo a comprehensive turnaround strategy to align its operations with that of the Microcred network.
“We are extremely excited about this acquisition, and we strongly believe it will usher in a new era in our quest to be the leader in providing financial services and products to the informal markets in Zimbabwe. We are convinced that the latent potential that has always been in MicroKing will be unlocked to the benefit of our clients and various partners,” said Lloyd Borerwe, acting Managing Director of MicroKing.
The combination of Microcred and AfricInvest brings with it an integrated mix of sector-specific expertise and strong shareholder support. This will allow MicroKing to leverage the financial and technical capabilities of the new shareholders to enhance its value proposition to the formal and informal sectors and broaden its role in contributing towards greater financial inclusion in Zimbabwe.