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Tuesday, 19 April 2022

Sri Lankan NBFI acquires 100% of First Microfinance, aims to grow loan book and branch network

Sri Lankan conglomerate LOLC Group has acquired 100% of First Microfinance in a transaction worth EGP 80.2 mn, First Microfinance CEO and Managing Director Ahmed Kamal El Din told Enterprise, confirming a report from Al Mal. The acquisition marks LOLC Group’s entry into Egypt and will see the firm introduce new services — including micro ins, micro leasing, and consumer finance — starting 2023, he told us.

LOLC plans to grow First Microfinance’s loan book: It is aiming to increase the microlender’s outstanding portfolio to EGP 1.4 bn from a current EGP 190 mn over the next three years, Kamal El Din told us. It also wants to expand the company’s branch count here by more than 10x to reach 100 over the next two years, he said. First Microfinance will retain its name, he added.

Who’s who:

  • First Microfinance is a microlender established in 2005 by nonprofit Aga Khan Development Network’s microfinance agency. It operates nine branches across Egypt, with a majority of its clients residing in rural areas. The company is focused on development lending, with 50% of its portfolio allocated to livestock and fishing loans. SME finance makes up another 15% of its portfolio.
  • LOLC Group is a Sri Lankan conglomerate listed on the Colombo Stock Exchange. It owns stakes in financial services companies in Africa and Asia, and was the third-largest listed company in Sri Lanka by revenue in 2021.

The acquisition was made via three of LOLC’s subsidiaries: LOLC Finance, Commercial Leasing & Finance, and LOLC Mauritius Holding, Kamal El Din said.

Advisers: Our friends at EFG Hermes advised on the transaction.

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