Carrefour takes Sh3bn loan

Elvis Onchwari | May 7, 2020

South Africa’s Standard Bank Group has lent Sh3 billion to Dubai-based conglomerate Majid Al Futtaim to expand its supermarkets business in Kenya through the Carrefour franchise. Last month the company disclosed in its annual financial reports that the french retail chain Carrefour recorded sales worth Sh18.7 billion from its Kenyan outlets last year. The company Majid Al Futtaim, which is the exclusive holder of Carrefour’s franchise in Kenya, announced the 28 percent jump in sales from Sh14.6 billion recorded in 2018 was evidence that its aggressive expansion bid across major towns in Kenya was paying off.

The retailer said since launching in Kenya four years ago, the franchise of the French hypermarket chain had grown faster than expected, attracting a strong clientele base among the country’s expanding middle class.

Carrefour Kenya has emerged as one of the major players in the local retail market, having launched operations in 2016 at The Hub in Karen, Nairobi.

It has grown rapidly since then and now has seven stores including, Nairobi’s Two Rivers Mall, Thika Road Mall, The Junction, and Sarit Centre branch.

The eighth branch is set to open up along Uhuru Highway near Nyayo roundabout-taking over space previously occupied by the collapsed retailer Nakumatt. The branch, which was set to be opened before the end of March, has faced delays due to the current Covid-19 pandemic.

Its expansion and that of others like Naivas International Limited have been enabled by the collapse of the former retail giant Nakumatt Holdings.

Standard Bank Group, in its latest annual report, stated that it partnered with Majid Al Futtaim (MAF), Dubai’s leading shopping mall, retail, and leisure group, to support the expansion of their retail presence in Kenya.

“MAF currently has seven Carrefour hypermarkets in Kenya and plans to open another six by the end of 2020.” Standard Bank said in its latest annual report. Standard Bank provided Majid Al Futtaim (MAF) with a KES3 billion loan to support this expansion, which will stimulate economic growth in the consumer sector and help to create more jobs in the Kenyan Market

The new credit facility signals further expansion and Carrefour Kenya’s expansion can be seen through a sharp increase in its asset base. The company reported total assets of Sh7.2 billion in the year ended December 2019 up from Sh4.3 billion recorded in December 2018.

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