Sidian Bank has secured a Sh1.2 billion investment from Danish entity Investment Fund for Developing Countries (IFU), marking a significant capital infusion to address years of financial strain. The funds will strengthen the lender's core capital, which declined from 23.1% in 2016 to 13.9% by the third quarter of 2018. IFU's tier two capital investment positions it to acquire a 20% stake, making it the second-largest shareholder after Centum, which holds a 73% interest.
Sidian Bank CEO Chege Thumbi confirmed IFU's entry as a strategic investor, noting the capital boost will enable the bank to expand lending to small and medium enterprises, micro-finance institutions, and corporate clients. "For every shilling invested, the bank can lend eight times," he explained, emphasizing the capital's role in achieving regulatory targets. The injection follows a previous Sh1.1 billion raise from Centum in 2018.
The investment aligns with Sidian's goal to transition to a tier 2 bank by 2022. Shareholders approved a combined Sh2.7 billion in capital raises, aiming to increase total assets to Sh35 billion. Thumbi highlighted growth in non-funded services, which rose from Sh7 billion to Sh16 billion, as part of the bank's diversification strategy.
