The Competition Authority of Kenya (CAK) has granted regulatory clearance for Moniepoint Inc. to acquire a 78% stake in Sumac Microfinance Bank Limited, concluding that the deal poses no threat to market competition or public interest in the country’s financial services sector.
In a statement released by the CAK, the transaction—having met the threshold for mandatory review—was approved unconditionally after a comprehensive assessment of its potential effects on Kenya’s microfinance landscape.
Moniepoint Inc., a U.S.-registered Nigerian fintech company, operates primarily through Moniepoint Microfinance Bank, its Nigerian subsidiary. The acquisition of Sumac Microfinance marks the firm’s first entry into Kenya’s financial services market.
Sumac, established in 2002, is a licensed deposit-taking microfinance bank in Kenya, offering services such as lending, deposits, monetary intermediation, leasing, insurance agency, money transfer, and forex trading.
Rationale Behind Regulatory Approval
The Authority noted that Moniepoint’s lack of existing operations in Kenya meant the acquisition would not lead to increased market concentration or dominance.
“Specifically, there will be no employment loss, and all the current employees will be retained under the current terms.
Premised on the above, the Authority approved the proposed acquisition of 78% shareholding of Sumac Microfinance Bank Limited by Moniepoint Inc. unconditionally,” the Authority stated.
Key considerations behind the approval include:
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No existing presence: Moniepoint has no current operations in Kenya, meaning the acquisition introduces a new player without displacing existing competitors.
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Minimal market share: Sumac is categorized as a medium-sized microfinance institution with a 4.3% market share, below the 5% threshold that defines larger players.
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Healthy market structure: As of December 2023, Kenya had 14 licensed microfinance banks, with large institutions holding 83.8% of the market, medium-sized banks at 15%, and smaller institutions accounting for just over 1%.
No Negative Public Interest Impact
In its evaluation, the CAK also considered public interest factors, such as employment, SME competitiveness, and the resilience of Kenya’s financial services ecosystem. It found no anticipated job losses, as Moniepoint intends to retain all existing Sumac staff under their current terms.
Additionally, the Authority found no evidence that the acquisition would adversely affect small and medium enterprises (SMEs) or the broader microfinance sector.
Context: Nigerian Financial Expansion into Kenya
The CAK’s green light for Moniepoint follows a broader trend of Nigerian financial institutions expanding into East Africa:
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Flutterwave, another Nigerian fintech, currently operates in Kenya, offering services like M-PESA integration and international money transfers.
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Access Bank PLC, a subsidiary of Access Holdings PLC, recently completed the acquisition of 100% of the National Bank of Kenya (NBK) after securing regulatory approval from both the Central Bank of Kenya and the National Treasury.
According to Access Bank, the acquisition will strengthen its regional presence and combine NBK’s local expertise with Access Bank’s global footprint to deliver a more dynamic and efficient banking ecosystem.
