Blue Financial to buy NedFin

SOUTH African microlender Blue Financial Services said on Friday it had agreed to acquire Zambian mass-market lender Nedfin, for $9M making it the biggest microfinancier in that country. CEO Dave van Niekerk said Blue's Botswana-based unit, Blue Employment Benefits (BEB), planned to acquire the entire share capital and shareholder loan accounts of Nedfin.


BEB holds a nonbanking financial institution licence granted to it by the Bank of Zambia in September 2005. The short-term lender has eight branches in Zambia.
"This acquisition will result in Blue, which already has a presence in Zambia, having a combined branch network there of 20 branches and will effectively make Blue the single biggest micro- financier in that country," Van Niekerk said.

"Nedfin, which has always been a competitor in Zambia, is focused on shorter-term loan products and is a cash-generative business that has seen consistent growth in volumes and profitability in the past year. This acquisition is part of Blue's longer-term strategy to become the largest microfinancier in Africa," he said.

Blue, which is the largest microlender listed on the JSE's alternative exchange market AltX, operates in nine African countries, including its home base SA, Botswana, Zambia, Uganda, Tanzania, Malawi, Lesotho, Kenya and Namibia. The company, which will dual list on the Botswana Stock Exchange on Thursday, planned to extend its operations to Rwanda, Angola, Cameroon and Swaziland. Unlike mainstream financial institutions that focus on the middle- and higher-income market, Van Niekerk said Blue had identified "its market as being the millions of modest-earning, but salaried Africans who are the continent's teachers, soldiers, nurses, policemen, civil servants and miners".

"Until recently, these formally employed lower-income Africans could only access rudimentary banking services, and were often seen as 'unbankable' by the mainstream financial service institutions, due to size of loans and lack of security this market requires," Van Niekerk said.
"Blue's comprehensive industry knowledge, pioneering collection systems and strategically placed distribution network have resulted in exceptional growth over the past four years. This rapid expansion has necessitated the significant enlargement of its capital base in order to meet current demands," he said.