MICROCAPITAL BRIEF: Old Mutual Group (OM) Acquires Microfinance Company Faulu Kenya

Old Mutual Group (OM), a South Africa- and UK-based insurance and banking institution, reportedly has purchased a majority stake in Kenya’s Faulu Company, a deposit-taking microfinance company founded in 1992. The cost of this transaction has not been released. This acquisition reportedly is part of Old Mutual’s strategy to expand its African footprint, according to a statement attributed to CEO Julian Roberts. The company recently purchased two life insurance companies in Ghana and Nigeria [1].

According to the US-based nonprofit Microfinance Information Exchange (MIX), as of 2013 Faulu Kenya had USD 89 million in total assets, a gross loan portfolio of USD 63 million, 78,000 active borrowers, USD 55 million in total deposits from 268,000 depositors, return on assets (ROA) of 2.38 percent and return on equity (ROE) of 27.5 percent. As of December 2012, OM manages funds amounting to GBP 262 billion (USD 403 billion) and unit trust and mutual funds amounting to GBP 10.8 billion (USD 16.6 billion) and serves 14 million customers in approximately 20 countries.

By Meghan Gillis, Research Associate

About Faulu Kenya

Faulu Kenya was founded in 1992 as a pilot microlending program of Food for the Hungry International (FHI), a relief and development organization based in the USA. In 1999 it spun off into a limited liability company 70 percent owned by FHI. England-based Old Mutual purchased a majority stake of the company in 2013. According to the US-based nonprofit Microfinance Information Exchange (MIX), as of 2013 Faulu Kenya had USD 89 million in total assets, a gross loan portfolio of USD 63 million, 78,000 active borrowers, USD 55 million in total deposits from 268,000 depositors, return on assets (ROA) of 2.38 percent and return on equity (ROE) of 27.5 percent.

About Old Mutual Group

Founded in 1845 and based in London, England, Old Mutual Group (OM) offers savings, insurance and investment services. OM specializes in three business areas: (1) wealth and short-term insurance in emerging markets; (2) US asset management; and (3) banking in South Africa. As of December 2012, OM manages funds amounting to GBP 262 billion (USD 403 billion) and unit trust and mutual funds amounting to GBP 10.8 billion (USD 16.6 billion) and serves 14 million customers in approximately 20 countries.

Sources and Additional Resources

[1] Business Day: “Old Mutual extends Africa footprint with Kenya buy,” http://www.bdlive.co.za/africa/africanbusiness/2013/07/04/old-mutual-extends-africa-footprint-with-kenya-buy

MicroCapital brief, April 22, 2013, “MICROCAPITAL BRIEF: Younger People in Kenya More Open to ‘Game Changer’ of Buying Investment, Insurance Products by Mobile Phone,” https://www.microcapital.org/microcapital-brief-younger-people-in-kenya-more-open-to-game-changer-of-buying-investment-insurance-products-by-mobile-phone/

MicroCapital brief, May 19, 2012, “MICROCAPITAL BRIEF: Faulu Kenya, Airtel Form Partnership to Offer Mobile Credit,” https://www.microcapital.org/microcapital-brief-faulu-kenya-airtel-form-partnership-to-offer-mobile-credit/

MicroCapital Universe Profile: Old Mutual South Africa

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Old+Mutual+South+Africa+%28OMSA%29<https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Old+Mutual+South+Africa+(OMSA)>

MicroCapital Universe Profile: Faulu Kenya?

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Faulu+Kenya

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