UK impact investor sells $27-million stake in bank founded by Kenyan businessman

Feyisayo Ajayi -

Key Points:

  • British International Investment (BII) completes sale of 10.13% stake in I&M Group for $27 million, concluding a seven-year partnership.
  • The transaction marks a significant secondary deal in East African financial history, shifting ownership to local investor Africinvest from CDC Group’s BII.
  • I&M Group, led by Kenyan tycoon Suresh Bhagwanji Shah, continues growth trajectory with a focus on digital expansion and financial inclusion across East Africa.

British International Investment (BII), the UK’s development finance institution and impact investor, has finalized the sale of its 10.13-percent stake in I&M Group, an East African financial services conglomerate founded by Kenyan businessman Suresh Bhagwanji Shah.

The divestment, valued at Ksh3.47 billion ($27 million), is a strategic move that concludes BII’s seven-year partnership with I&M Group and facilitates the entry of a Local Investor into the leading East African financial services conglomerate.

I&M Group transitions as BII sells stake

Formerly known as CDC Group, BII initially invested $50 million in 2016 to acquire a 10.1-percent equity share in I&M Group. This investment supported I&M Group’s growth strategy over the years, consolidating its position as a leading player in the East African financial market.

The transaction stands as one of the most substantial secondary deals in recent East African financial history. Speaking on behalf of I&M Group, Executive Director Sarit Raja-Shah acknowledged BII’s pivotal role in advancing the company’s strategic initiatives during their partnership.

“It is notable that when BII invested in the company, we had just embarked on our iMara Strategy which was to be implemented in three cycles,” noted Sarit Raja-Shah. “As we transition to Africinvest, our new strategic investor, we continue our commitment to sustainability and enhancing financial inclusion in the markets we serve.”

I&M Group: East African financial powerhouse

I&M Group, established in 1974 by Suresh Bhagwanji Shah, serves as the non-operating holding company for I&M Bank Limited. The financial services group boasts active operations in Kenya, Tanzania, and Rwanda, along with a joint venture in Mauritius.

Shah, credited with transforming I&M into one of East Africa’s leading banking groups, maintains a beneficial 10.98-percent stake in the top-performing financial services provider, equivalent to 178,514,362 ordinary shares. Shah also holds a majority stake in MTZ Holdings, the recent acquirer of Nairobi Business Park, a prime office complex in Nairobi.

The recent acquisition of BII’s stake by the local investor enhances I&M Group’s local ownership and strengthens its market understanding and operational agility. With a strategic focus on expanding digital offerings and enhancing financial access, I&M Group is well-positioned to capitalize on burgeoning opportunities in East Africa’s dynamic economic landscape.