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Faulu Microfinance Bank Secures Ksh 900 Million to Enhance Digital SME Banking.

In a significant move aimed at strengthening its digital banking capabilities, Faulu Microfinance Bank has received over Ksh 900 million from its parent company, Old Mutual. This substantial capital injection is intended to enhance Faulu’s operations and realign the business model for sustainable, long-term growth.

Faulu also announced that it would be growing its Micro, Small and Medium Enterprise (MSME) support offering, as well as implementing an enhanced distribution network.

The strategic infusion aligns with Faulu’s renewed focus on digital banking and streamlined distribution channels. CEO Julius Ouma highlighted the bank’s ongoing efforts to enhance digital services over the past 18 months, positioning Faulu to better serve its customers through online platforms.

“We are eager to become a leader in the digital finance space,” Ouma stated. The bank aims to leverage this investment to improve accessibility and convenience for its clientele, particularly within the MSME sector.

The funds will facilitate the expansion of Faulu’s digital infrastructure, enabling more efficient and user-friendly services. The bank plans to enhance its agency network, which currently boasts over 70 active agents, to provide better coverage and service delivery. Additionally, Faulu will implement a new operating model designed to reduce costs and boost competitiveness.

A critical aspect of Faulu’s strategy is the increased support for MSMEs, which are seen as vital to Kenya’s economic health. The bank has already initiated partnerships to offer working capital facilities through a flagship digital lending platform. Ouma emphasized the importance of this sector, noting, “MSMEs represent the lifeblood of our economy.”

Ouma noted: “We see great opportunity to grow our investment and support amongst MSMEs as they represent the life blood of our economy. We will also be providing more convenient transactional services. Over the last year, we have partnered with strategic partners to provide working capital facilities to MSMEs through a flagship digital lending platform. We will also be providing more convenient transactional services across the board.”

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Arthur Oginga, CEO of Old Mutual Holdings, expressed confidence in the strategic shift, asserting that it would deliver sustainable value to all stakeholders. Faulu Chairman George Maina echoed this sentiment, highlighting the bank’s commitment to being a trusted financial partner for its customers.

 “This refocus is also in line with our purpose of being our customers’ most trusted financial partner and helping them achieve their financial goals. It is also critical to the bank’s ongoing competitiveness in an ever-expanding financial services sector in Kenya. We are excited at the opportunity to refocus the Faulu business as we believe that it will deliver enhanced value for both our customers and our business.” George stated.

The SME sector is a vital component of Kenya’s economy, contributing significantly to job creation and GDP. By supporting SMEs through enhanced digital banking services, Faulu Bank is not only empowering individual businesses but also contributing to the overall economic growth and stability of the country.

 

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