Kenya - Afrikan Heroes

Kenyan Loan Guarantors May Soon Be Hard To Be Sued

May 8, 2019

Barring any last minutes changes, loan guarantors in Kenya may soon be hard to be dragged to court. This is because Kenyan National Assembly’s Committee on Justice and Legal Affairs has approved, for passage into law, the Kenyan Law of Contract (Amendment) Bill, 2019. The Bill proposes that in case of a default to repay loan by the principal borrower, the creditor should first auction the assets of the principal borrower before making for the property of guarantors.

A Breakdown of The Bill:

The law will only apply to cases that take place after the Bill becomes law, while the status quo shall remain for current cases.

The Bill seeks to amend Law of Contract Act, Cap 23 of Kenya.

The new position also provides that no suit shall be brought against a guarantor of any debt or promise unless the agreement is in writing and signed by the guarantor.

Related: World Bank Approves $250 Million Loan for Kenya’s Affordable Housing Project

The move may not be unconnected with the decision of the Kenyan high court last year which allowed banks and other financial service providers to blacklist guarantors with Credit Reference Bureaus (CRB) in case of bad loans.

The ruling was made in a case where one Obadiah Gitonga had sued Cooperative Bank for blacklisting him over a defaulted loan where he was the guarantor. Mr Gitonga demanded to be delisted from CRB, a request the court denied saying that the bank acted within the precincts of the law.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

US Embassy In Kenya Suspends E-Passport Requirement

May 3, 2019

The US Embassy in Kenya has put on hold a requirement that would have compelled all new US visa applicants to acquire the new e-passport.

The US embassy made the announcement on their Twitter handle saying that Visa applicants may now apply for a US visa with a non-digital Kenyan passport and that they would place a US visa in a non-digital passport until further notice.

Holders of Current US Visas Have Been Advised Not to Take Any Action.

UPDATE: Visa applicants may apply for a US visa with a non-digital Kenyan passport. We will place a US visa in a non-digital passport until further notice. Holders of current US visas do not need to take any action.— U.S. Embassy Nairobi (@USEmbassyKenya) May 1, 2019

The announcement came barely 24 hours after the US embassy issued a notice informing all new visa applicants that they would only be granted the travel permit on the new e-passport.

The US embassy had made the announcement on Twitter handle stating that travellers with a valid US visa may travel with their current visa in the old passport but must also have the new e-passport to be allowed entry.

New Visa Applicants

The embassy had further stated that new US visa applicants must first possess the new passport before being issued with the US visa.

“Travelers with a valid US visa may travel with their current visa in the old passport but must also have a new e-passport for entry. It is not necessary to apply for a new visa,” the embassy had said.

Clarification:

US visas & non-digital Kenyan passports: U.S. visa applicants may make an appointment using old Kenyan passport but must have new e-passport before the US visa can be issued. Passports must be valid for 6 months upon entry & non-digital passports expire Aug 31, 2019.

— U.S. Embassy Nairobi (@USEmbassyKenya) April 30, 2019

Stringent Requirement

“US visa applicants may make an appointment using old Kenyan passport but must have new e-passport before the visa can be issued. Passports must be valid for 6 months upon entry & non-digital passports expire Aug 31, 2019,” the embassy had further said.

These developments have all come with the deadline for acquiring the new e-passport fast approaching.

Also See: World Bank Approves $250 Million Loan For Kenya’s Affordable Housing Project

The Immigration Department has however been under scrutiny from Kenyans over the perceived stringent requirements set out to applicants of the new e-passports.

Passport Application

The requirements for applying for the e-passport include a birth certificate and copies of parents’ Identification Cards.

Holders of the old generation passports must acquire the e-passport before August 31, 2019. All the old generation passports will be deemed invalid thereafter.

Applicants are required to start the application process for their passport on the eCitizen platform.

Thereafter they will be required to visit an immigration office in Nairobi, Mombasa, and Kisumu for collection of fingerprints, digital photo and signature and also to drop required documents.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

Kenya’s Second Biggest Bank Acquires Atlas Mara’s Stakes In Four Countries

May 2, 2019

With operations in 7 different countries and $2.6 billion dollars in asset, it appears Atlas Mara is fed up at last. The sub-Saharan bank, founded by ex-Barclays Plc chief, Bob Diamond says it is moving out of its operations in Zambia, Rwanda, Mozambique and Tanzania, just for a 6.27 percent stake in Nairobi-based Equity Group Holdings Plc, the second biggest bank in Kenya by asset. The deal is going to take the nature of a swap, meaning that Equity Group of Kenya would now take over operations in those countries Atlas Mara has exited.

The Transaction is Worth About $106 Million

Equity Group said it would issue 252,482,300 new shares, representing 6.27 percent of its expanded share capital in consideration of the shares Atlas Mara owns in the target banks.

“This implies that the monetary value of the consideration to be paid is the equivalent of 10.7 billion shillings (equivalent to approximately $105.4 million),” Equity said.a

Details of The Deal

In a statement released by Equity Group Holdings, the deal with Atlas Mara include:

A 62 per cent of the share capital of Banque Populaire du Rwanda
100 per cent of the share capital of African Banking Corporation Zambia,
100 per cent of the share capital of African Banking Corporation Tanzania and;
100 per cent of the share capital of African Banking Corporation Mozambique.
Atlas Mara will then become a shareholder in Equity Group Holdings in Kenya.
The transaction will be arranged by Stanbic Bank Kenya and Anjarwalla & Khanna, the largest corporate law firm in east Africa.
The deal is subject to regulatory approvals in the various countries and once finalized, Atlas Mara would become one of Equity’s shareholders, it said.

Equity Group hopes the deal will give it the room to expand its footprint in Africa.

“Board of Directors have agreed to the entry into a binding term sheet through a share swap to exchange certain banking assets of Atlas Mara in four countries for shares in Equity Group,” said James Mwangi, Equity Group Holdings CEO.

End of The Road For Atlas Mara?

Hard as it may seem, Atlas Mara, which completed four acquisitions in 2014 alone, would now see a major reorganization. Mr. John Staley, the bank’s Chief Executive Officer would be stepping down to pursue other interests, after a review of the bank’s business showed it has struggled to contain costs that engulfed income and its share price plummeted more than 80 percent since being listed in London at the end of 2013.

The bank faces much stronger and bigger lenders in the seven African nations where it operates, and also received criticism for overpaying for some acquisitions.

After this, the Atlas Mara executive team would all proceed to Chairman Michael Wilkerson, who also chairs Fairfax Africa Holdings Corp., which holds 49 percent of Atlas Mara after injecting funds into the company, for further directions.

Getting a stake in Equity Group would mean Atlas Mara becomes a meaningful shareholder in “one of Africa’s most successful and well-run banks,” the company said.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.