Pan-African housing financier Shelter Afrique is seeking institutional investors to bolster its capital standing after rebranding into a development bank last year, which allowed it to have an additional class of investors.
The revision of the lender’s article of association by its shareholders to elevate it to a development financial institution in October last year also allowed it to onboard private sector players, pension funds, commercial banks, and non-African financial institutions as its shareholders, but it is yet to get any so far.
The Nairobi-based continental lender is now in talks with multiple financial institutions including the Jeddah-based Islamic Development Bank and the United States International Development Finance Corporation (DFC) to onboard them as investors, according to its chief executive Thierno Habib Hann.
Others are the Arab Bank for Economic Development in Africa and some pension funds across the continent, which could soon inject more investments in the financier, lifting its capital base.
“That strategy will allow us to diversify our source of funding, and diversify capital of this institution, and that’s beyond our engagement with our current shareholders and other African countries that also want to join us,” said Mr Hann.
The lender’s shareholders, led by Kenya, its largest investor, will be convening in Kigali next week for the annual general meeting where the new article of association will be ratified, paving the way for admission of the new investors.
Shelter Afrique, founded in 1982 alongside the African Export-Import (Afrexim) Bank and the Africa Reinsurance Corporation (AfricaRe), has been struggling to boost its capital and shareholding, significantly lagging behind its peers.
It currently has a share capital of $500 million (Sh65 billion), while its peers Afrexim Bank and AfricaRe have a capital base of $5.2 billion (Sh673 billion) and $991 million (Sh128 billion) respectively as of the end 2022.
According to its latest financials, the lender made a loss of $11.6 million (Sh1.5 billion) in the year ended December 2022, forcing it to skip dividend payments for the seventh consecutive year. It last paid dividends in 2015 when it gave its investors $6.82 (Sh883) per share.
The Kenyan government is currently the largest shareholder of the financier with a 16.78 percent stake, followed by Nigeria with 15.74 percent and the African Development Bank (AfDB), which owns 12.11 percent.
It is owned by a total of 44 African countries, the AfDB and AfricaRe.
