Home » Led by Kenya’s richest families, NCBA Group plans to spin out M-Shwari, other fintech businesses as separate unit

Led by Kenya’s richest families, NCBA Group plans to spin out M-Shwari, other fintech businesses as separate unit

by Omokolade Ajayi
Uhuru Kenyatta

NCBA Group, a financial services conglomerate owned by Kenya’s wealthiest families, has announced that it is in the process of spinning out its fintech unit, which includes M-Shwari, to create a standalone company that will provide better digital banking services to its customers.

According to John Gachora, CEO of NCBA Group, who announced the strategic move to create a separate fintech unit that will host the group’s digital loan platforms in Kenya and the five countries where it has active operations, the fintech business will operate as a separate entity under NCBA, with its own CEO and board of directors.

“What we are now discussing is how we package our business as a fintech so that it can get the right valuation,” Gachora said. “I understand from what I have seen in some write-ups that people don’t know the details of Fuliza and M-Shwari but we can package it in a way where we can report on all these details.”

“The vision is to have a separate fintech where we put all these businesses together, get the right valuations, give the right disclosures and therefore get some more shareholder value,” he added.

The decision to separate its fintech units comes on the heels of plans to build seven new branches by the end of the year in line with its retail expansion objectives and branch growth program, which were introduced last year.

In the past 18 months, 18 additional branches have opened across the region as part of this new program. This year alone, the group has opened four branches in Kenya. It hopes to add seven more by the end of the year, boosting its overall branch count to 115 from 104 at the start of the year.

NCBA Group is a Nairobi-based financial services conglomerate that operates as a non-operating holding through its vast network of subsidiaries in Tanzania, Rwanda, Uganda, and Cote d’Ivoire.

The Kenyan banking firm, which is partly owned by the super-rich Kenyatta, Merali, and Ndegwa families, has 109 branches in five countries: Kenya, Uganda, Tanzania, Rwanda, and Ivory Coast. It was formed in 2019 by the merging of NIC Bank Group and Commercial Bank of Africa Group.

After partnering with telecoms operator Safaricom in 2012 to establish the leading service, M-Shwari, NCBA has earned significant dividends for pioneering mobile phone-based lending in Kenya.

It also introduced a service in 2018 to expedite payments for goods or services delivered by suppliers using an online web-based platform.

The recent decision to split its fintech company comes at a time when banks are transitioning away from the traditional branch-based model in order to accommodate the digital transformation in the financial services industry via the disruptive models of fintech companies across Africa.

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