Private equity firms AfricInvest, Catalyst invest in Kenya's Prime Bank

NAIROBI, Jan 8 (Reuters) - Private equity firms AfricInvest and Catalyst Principal Partners have jointly acquired a “significant minority” stake in a second tier Kenyan lender, Prime Bank, they said on Tuesday.

The banking sector in the East African nation has seen some moves towards consolidation after the government capped commercial lending rates in 2016.

The investment had been carried out through a special purpose vehicle, AfricInvest Azure, formed jointly by AfricInvest and Catalyst, the parties said in a statement. They did not disclose the terms of the deal.

The local Daily Nation newspaper said the two private equity houses had acquired a 24 percent stake in the lender after putting in 5.1 billion shillings ($50.10 million), citing unnamed sources.

Paul Kavuma, the head of Catalyst, declined to comment on the report when contacted by Reuters.

Prime Bank, which was founded in 1992 by local investors, controls just under 2 percent of the total banking assets in the sector. It focuses on corporate banking and it recently acquired an insurance subsidiary.

AfricInvest is part of a group based in Tunisia while Catalyst is based in Kenya.

$1 = 101.8000 Kenyan shillings Reporting by Duncan Miriri; editing by Jason Neely