DFCU recently took over some of the Crane Bank assets and liabilities
DFCU Bank has secured a USD 50 million bridging credit facility from newly formed investment company, Arise to ensure recapitalization of the bank and compliance with regulatory capital thresholds as required by the regulator, Bank of Uganda.
The Bank recently concluded an agreement with BoU to purchase the assets and assume the liabilities of Crane Bank Limited (CBL), which had been in receivership since October 2016.
The acquisition of CBL allows DFCU Bank to diversify its service offerings to its clients and make banking more accessible to the public. Further, the integration will enhance DFCU Bank’s competitive edge against peers in the retail and Small Medium Enterprise (SME) sector.
According to Arise Chief Executive Officer, Deepak Malik the facility was availed on commercially-agreed terms, to enable commencement of the recapitalisation of DFCU Bank in the short term.
“Arise supports the planned expansion of DFCU Bank. We foresee the integration as a catalyst for creating a strong and efficient Ugandan bank, which will have extensive local representation and scalability of distribution (via branch and digital channels)” said Malik.
“This partnership speaks directly to the mandate of Arise, which is to collaborate with local Financial Service Providers (FSPs) in Sub Saharan Africa to boost economic growth through strengthening the banking sector,” he added.
Malik noted that Arise is committed to developing inclusive financial systems in Africa and partners with sustainable FSPs to strengthen their ability to supply capital and financial services to SMEs, the rural sector and unbanked people.
“Arise is supportive of DFCU Bank’s growth ambitions, which will enable the organisation to improve its market position and efficiencies. In addition, we believe that this transaction is a catalyst for improved returns to all stakeholders”, concluded Malik.
In his remarks, Juma Kisaame, Managing Director DFCU Bank commented, “The acquisition gives us the impetus to achieve our strategic objective of building a robust retail operation with multiple delivery channels whilst consolidating our position as a key player in the SME market segment. It also supports our goal of promoting financial inclusion in Uganda and we welcome the Arise partnership as a contributor to building a stronger financial sector in Sub Saharan Africa”.