Blue Financial Services seeks capital injection to back African growth.

By bne IntelliNews January 23, 2013
South African microfinance institution Blue Financial Services is seeking to raise additional capital from its majority owner, private equity group Mayibuye, to fund its growth plans for Africa, BDay Live reported. Blue is currently in talks for a capital injection of an unspecified volume with Mayibuye, which will boost its 51% stake in the microlender. Blue Financial Services CEO Johan Meiring explained that the funds are needed to support the companys lending businesses so that it can make more loans available to customers across the African continent. Blue, which is listed on the Johannesburg Stock Exchange (JSE) and on the Botswana Stock Exchange (BSE), operates in 15 African countries. Blues current growth strategy focuses on markets outside South Africa, as it considers that intense competition and thin margins, together with a potential bubble in unsecured lending, make its home country less attractive than the other African markets in which it operates. The company, which was declared technically insolvent in 2009 and was rescued by Mayibuye in 2010, has declared plans to grow its customer base to 5 million by 2015 from about 200,000, last reported at end-August 2012.

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