By Babajide Komolafe
Interswitch Limited, Nigeria’s premier transaction switching and e-payment processing firm, has acquired a controlling stake in Bankom Limited, Uganda’s only licensed interbank switch.
The deal which was sealed in Kampala last week and brokered by Renaissance Capital saw Interswitch acquire 60 percent of Bankom at an undisclosed price. Bankom was previously owned by Cashnet (80 percent) and Pesacom (20 percent).
Accordingly, Cashnet reduced their shareholding to 32 percent, while Pesacom now owns 8 percent in Bankom. Both Cashnet and Pesacom have significant Ugandan shareholding, composed of outstanding businessmen and entrepreneurs
Interswitch is jointly owned by some of the leading Nigerian Banks, as well as other institutional investors. In a joint statement, Dr. William Kalema, Bankom, Chairman and Mr. Mitchell Elegbe, Interswitch Managing Director, said that the union creates “a stronger Bankom with a renewed ability to handle the growing demand for a robust, market-driven electronic payment infrastructure to drive the growth of payment products of real value to banks, corporate organizations, utilities, government and the people of Uganda.
“This is a union of like-minded solution providers, whose vision for Uganda is a nation-wide real-time electronic funds transfer and transaction processing & switching solution, that takes away the burden of backroom processing from the banks, allowing them to do what they do best- raising deposits and providing credit, thereby improving the customer experience both in and out of the banking hall,” read the statement.
The duo added that, “We look forward to a win-win relationship with our member banks while creating a great user experience for their corporate, retail and government customers. We plan to reach out to banks that are not yet members of the Bankom network to see how we can provide value to them. We are also grateful to the Central Bank of Uganda that approved this historic transaction.”
Commenting about the acquisition, Charlotte Kaheru, Bankom Managing Director, said that it had come at the right time, when the company had finished laying a solid foundation for growth.
“We have just finished implementing phase one of our growth strategy and we have started seeing increased customer confidence in our solutions as evidenced by the growth in member banks and ATMs on the network. The strengths and synergies created by this union will further reinforce our product base and network footprint,” she said.
Patrick Mweheire, Head of Investment Banking, Africa at Renaissance Capital said the deal is “a turning point in both companies’ strategic future.” He further added that “Interswitch has acquired an excellent platform to repeat its successes in Nigeria and Bankom instantly has access to a unique set of products and services that can be marketed across the East African region.”
It is hoped that Interswitch’s partnership with Bankom will re-position Uganda for regional switching and payment processing, provide quality value driven services to member banks and their customers, and more importantly, attract and retain a self driven and result oriented workforce through investment in people.