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Jafari Credit, the startup credit business subsidiary of Centum Investment, an East African-focused investment firm controlled by the family of the late Kenyan tycoon Chris Kirubi, has issued more than Ksh200 million ($1.37 million) loans to civil servants.
The credit issued over the span of a year and a half was facilitated through a non-deposit-taking microfinance company launched by Centum in 2021, with operational activities commencing last year. This underscores Centum’s commitment to lending within the region, particularly targeting borrowers with lower risk.
Explaining the rationale behind establishing the non-deposit-taking microfinance institution, which specializes in providing long-term credit to civil servants employed by the national and county governments, Centum revealed that Jafari Credit aims to meet the surging demand for consumer loans and mitigate lending risks by focusing on civil servants, with recoveries facilitated through payroll checkoffs.
Centum noted that recent macroeconomic shocks have caused banks to scale back their willingness to lend to small and medium-sized enterprises (SMEs) and individual borrowers. This development is perceived by the firm as an opportunity to expand its lending to civil servants, with an ambitious target of Ksh1.24 billion ($8.5 million) in loans this year.
Centum Investment, the largest publicly traded investment firm in Kenya, has a strategic focus on investments across various sectors, including real estate and private equity. Their portfolio spans consumer goods, financial services, agribusiness, and power. However, the firm has faced financial challenges following the passing of its visionary leader, Kirubi.
Kirubi, a leading Kenyan tycoon and serial investor who passed away in 2021 at the age of 80, owned a significant 31-percent stake in Centum Investments, which is now held by his son, Robert Kirubi, and daughter, Mary-Ann Musangi, who inherited 80 percent of his fortune, including stakes in KCB Group, Haco Industries, Bendor Estate Limited, and other businesses.
Jafari Credit’s expansion bolsters Centum’s presence in the credit market, adding to its controlling stake in Sidian Bank, which reported a loan book of Ksh24.26 billion ($16.8 million) at the end of June.
Notably, Jafari Credit maintains default rates for civil servant loans at less than 1 percent, a significant contrast to the banking sector’s average non-performing loan ratio, which exceeds 14 percent.
Centum joins a cohort of financial entities targeting civil servants, including traditional banks, micro-financiers, and Savings and Credit Cooperative Organizations (Saccos).
