Kenyan commercial bank, Jamii Bora is seeking to raise Sh1 billion ($11.4 million) through a rights issue in September in a bid to meet the capital requirement set by the Central Bank of Kenya (CBK) and also fund its expansion plans.

Holders of the bank’s corporate bond, worth up to Sh400 million ($4.6 million) have also agreed to convert their interest into shares as a way of helping Jamii Bora to raise 40 percent of the amount targeted in the rights issue.

“Once we get at least 75 percent investor approval in the coming weeks, we shall have completed the transaction by September,” said Jamii Bora chief executive Samuel Kimani while commenting on the bond to share plan.

Further into its capital raise plans, the bank is looking for a strategic investor to buy a Sh200 million ($2.3 million) stake, while it raises Sh400 million in cash.

Mr Kimani told the Business Daily that the rights issue is expected to be completed in October, while sale of stake in the bank is expected to also have been finalised by the year end.

Kimani told Kenyan news outfit Business Daily that the strategic investor when found will be entitled to just below five percent shareholding in compliance with CBK limits for buyouts without the apex bank’s approval.

Jamii Bora hope to have increased core capital to Sh2.4 billion ($27.3 million) by the end of the three deals intended to raise funds. This will enable the bank to increase lending to small and medium-scale enterprises (SME).