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VENTURES AFRICA – As part of its regional expansion plans, Kenyan lender, I&M Bank will expand into Uganda using part of funds it raised through a Sh10 billion ($114.8 million) bond.
“The bank aims to continue growing its regional footprint, particularly in the East African region, and is actively pursuing the fulfilment of this strategy with a view to having a presence in Uganda,” read a memo from the bank.
I&M however, did not mention how it plans to enter the region. However, analysts say they expect the bank to continue with the practice of buying shares in incumbents.
According to Head of Research at Suntra Capital, Moses Waireri, partnering with banks that are already up and running would ensure that I&M makes returns at minimal risk.
“Joint ventures are easier to set up and operate. Participants inject their expertise and returns are spread on a 50-50 basis, which is a fair way of doing business yet does not require a lot of capital,” said Mr Waireri.
The bank, which listed this year on the Nairobi Securities Exchange (NSE), has presence in Tanzania, Rwanda and Mauritius through joint ventures and majority stakes in other lenders.
It owns a 55.03 percent stake in I&M Tanzania, an 80 percent in I&M Rwanda and a 50 percent stake in Bank One (Mauritius), according to a Business Daily report.