Lonrho, the British conglomerate that is rapidly growing a portfolio of investments in Africa, has announced that it has signed a letter of intent to acquire 51% and board control of the second largest bank in Mozambique, Socremo Banco de Microfinancas (Socremo). The transaction is subject to Reserve Bank of Mozambique approval.
Socremo was founded in 1998 as a ‘non-bank financial intermediary’, and in May 2004 obtained a license to become a microfinance bank. According to the MixMarket, as at 31.12.06, it had total assets worth USD 13.5 million, a debt / equity ratio of 274% and a return on assets of -2.0%. It has 30,000 customers and, according to Lonrho, the number of accounts at the bank has grown 160% during the past year, leading to an increase in its credit portfolio of 103%.
To achieve its takeover, Lonrho has agreed to buy out a number of smaller shareholders. Those who will remain alongside Lonrho are AfriCap Microfinance Fund, the Dakar-based USD 15 million equity investment fund dedicated to the microfinance industry in Africa, with a 21% holding; Gabinete de Consultoria e Apoio a Pequena Industria (GAPI), a local development financial institution for small and medium enterprises, with 11%; and Nordic MicroCap, a Swedish microfinance fund, with 10%. The remainder of the equity will be held in Socremo’s Treasury.
According to AfriCap Microfinance Fund, Socremo is seeking further equity capital so it can meet the USD 3 million minimum regulatory capital required for it to become a commercial bank, which would allow it to offer additional financial services.
Lonrho has a historic interest in Africa, as it was founded as the London and Rhodesian Mining Company in 1909. After demerging its mining business in 1990s, it is now re-investing heavily in Africa with focus on a broad range of industries ranging from primary infrastructure to transportation, support services, hotels, leisure and natural resources.
To learn more about this author, visit David Satterthwaite's Website.
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David Satterthwaite
(Visit David's Website)
David brings 10 years of experience in
microfinance management, social
entrepreneurship, non-profit
management/fund-raising and microfinance
investment research.
David is the Chairman and President of
Prisma Microfinance, Inc., a retail
“microbank” operating in Central America.
He is also Chief Editor of
MicroCapital.org, a news and information
service for the microfinance community and
its investors. Each month,
MicroCapital.org publishes the
MicroCapital Monitor, the leading industry
newspaper.
David writes and speaks frequently on
microfinance. He has been a quest speaker
at many events, including: Microcredit
Summit 5+: Panel on Private Investment,
Milken Institute Global Conference, United
Nations Year of Microcredit Symposium for
Wall Street, Chicago Conference on
Microfinance, Harvard Social Enterprise
Conference, Dartmouth’s Business
Sustainability Conference, Wharton’s
Conference on Social Entrepreneurship,
Stanford’s Social Enterprise Club,
Columbia’s Social Enterprise Program and
the Net Impact Annual Conference. Through
his work with Prisma and MicroCapital, he
has been featured or quoted in The Wall
Street Journal, the Boston Globe, “All
Things Considered,” Reuters and
SocialFunds.com. David has been
recognized with the Compaq Computer
Corporation Leadership Award, the City
Year Inspiring Leader Award and the
National Social Venture Business Plan
Competition award for Best Social Impact
Analysis.
David has supported many non-profit and
for-profit social enterprises in different
capacities, including Access Technology
Learning Center, Agora Partnerships,
Bridges to Business, City Year, Fonkoze,
Kiva and National Social Venture
Competition.
David holds a B.A. with Honors in
Political Science from Haverford College.
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