Car & General’s 29 pc stake increase in Watu Credit Limited

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Car &General (C&G) has increased its shareholding in Watu Credit Limited by 29 percent from a previous 26.5 percent stake in the year ended September by additionally investing Sh38.6 million.

The boosted investment has amplified its sale of motorcycles and tuk-tuks as Watu Credit Limited funds the purchase of the two and three-wheeled autos in addition to brands sold by C&G such as TVs and Piaggio.

“In the current year, the group acquired an additional 2,500 shares in Watu Credit Limited leading to the total ownership by the group in Watu Credit Limited to 29 percent,” C&G states in its latest annual report.

In 2017, C&G acquired a 26 percent stake in Watu Credit worth Sh26.8 million. This value has grown to Sh418.8 million in the year ended September due to the associate’s increased profitability.

During the review period, the C&G’s share of Watu Credit’s profit valued at Sh247.4 million, a growth of 63.2 percent from Sh151.5 million the previous year.

Watu Credit Limited posted a net profit margin of nearly 25 percent. The profitable earnings enjoyed by alternative lenders, such as those running digital platforms uninhibited by regulations inflicted on mainstream banks.

The annual interest rates charged on the alternative lenders can be above 30 percent, contrary to the current average upper limit of 13 percent on bank loans.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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