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Mwalimu Sacco will soon have full control of Spire Bank when businessman Naushad Merali exits, the Senate heard yesterday.

Central Bank Governor Patrick Njoroge said the institution has filed a change in ownership that will see Mwalimu Sacco own all the shares.

“They will now be owned 100 per cent by Mwalimu Sacco. This will strengthen them in the move towards the new normal.

“We think that this is a new dawn for this institution,” Njoroge told the Senate Finance Committee.

The committee had sought to know the state of the bank and the risk it poses to the savings of teachers across the country.

Mwalimu Sacco bought a stake in the bank which was at the time saddled by a pile of bad loans.

The bad loans have affected the health of Mwalimu Sacco which had wanted to exit. 

More money

The new move, however, means that the Sacco will have to pump more money into the bank.

The struggling lender which has booked successive loses year after year has been looking for a strategic investor to inject much-needed capital due to erosion of shareholder capital.

“Spire Bank has a legacy problem, when they were acquired they had very many bad loans, that tag has stayed with it, it’s been limping through the period,” said Njoroge.

The legislators had expressed fears that the lender might collapse any time in the near future.