Kenyan lender I&M eyeing expansion into Ethiopia, Zambia and DRC

NAIROBI – Kenya’s I&M Holdings, operator of the country’s sixth-largest bank by assets, is seeking acquisitions in Ethiopia, Zambia and the Democratic Republic of Congo, a senior executive told Reuters.

Lenders in East Africa’s largest economy are working to cover new markets, helping clients trade more effectively in the region and spurring their own growth.

“We want to expand our business because that’s where our customers are, and we want to follow our customers and give them a comprehensive regional offering,” I&M regional director Chris Low told Reuters on Thursday.

Ethiopia is still closed to foreign banks, he said, but it is expected to eventually be opened up.

I&M will use internally generated cash to fund potential acquisitions, Low said, adding that it also has lines of funding with other institutions, including the International Finance Corporation, the private arm of the World Bank.

“We tend to have a conservative dividend distribution policy. We rarely distribute more than around 30%, so for internal resources we are in a position of strength where funds are needed,” he said. .

The lender, which already operates in Rwanda, Uganda, Tanzania and Mauritius, prefers acquisitions in new markets because new operations are more difficult to develop, Low said, but warned that potential targets must be well matched. .

“It’s not just ‘let’s go out and plant a flag,’ it has to be seen as real value because, at the end of the day, integration is not an easy thing to achieve,” Low said.

I&M, which began life as a community bank in 1974, became the first banking group to focus on corporate clients, which account for around three-quarters of lending.

But he now wants to reduce the share of business loans, targeting small- and medium-sized business (SME) customers, who make up 15-20% of the loan portfolio, Low said.

“We would like a much better balance because we see the SME segment as the economic driver,” he said.

(Reporting by Duncan Miriri; Editing by Simon Cameron-Moore)

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