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Social media has its many advantages but it also has a few disadvantages which include misinformation. As you well know a lie repeated many times becomes the truth which at times can be damaging. Last week, news that the Fidelity Bank was to be placed under statutory management by the Central Bank spread like wildfire on social media, this was despite the fact that an investor Duet Private Equity was in the process of injecting Kshs. 1.9 Billion into the bank. This is in a bid to strengthen its core capital and support its local and regional growth strategy.

Sadly, many people on social media usually rush to post details of issues that they are yet to confirm/have no knowledge about in a bid to be the first to break the news. As such they end up being agents of misinformation which at the end of the day dents their credibility. Therefore, it is wise to check and counter check before you post otherwise you might get sued. In the case of a financial institution such kind of misinformation often leads to a run on the bank which basically means that customers panic and rush to withdraw their funds from such a financial institution which greatly affects their capital ratios as well as their ability to operate. In a worst case scenario, it can even lead to closure of the bank due to baseless rumours and innuendo. Therefore, be careful what you post on social media as it may end up costing the livelihoods of many.

The Fidelity bank issue is a repeat of what happened to banks like Chase Bank whereby soon after Dubai bank was placed under receivership. Unscrupulous people started circulating a list on Whatsapp purportedly of banks to be closed which turned out to be false but not before causing panic withdrawals from the said banks.

That being said, there is no way that an international investor like Duet Group which is a UK-headquartered global alternative asset management firm with over US$5.6 billion of assets under its management would invest in a bank that is about to be closed down. Their decision to invest in the bank is clearly a vote of confidence in the bank’s management. According to Duet Group co-founder and CEO, Henry Gabay, Fidelity Bank gives Duet a perfect platform to invest in the Kenyan banking sector which he described as innovative and competitive. He continued to say, “Fidelity Bank is a reputable, well managed institution with an experienced team whom we are looking forward to working with. They have a robust financial technology platform and an aggressive expansion plan which we are looking to support both organically and by acquisition. More importantly, we value the shareholders’ commitment to staying and growing the business”.

The bank’s Executive Director, Mr. Sultan Khimji had this to say, “This primary capital increase will give us the ability to focus on larger transactions and increase our customer base. Duet’s investment in the form of growth capital is very significant for Fidelity Bank in its transformation to a mid-tier bank. None of the Bank’s existing shareholders are exiting as we are all very confident about the bank’s future.”

The investment in the bank by Duet follows on from private equity investments in Ethiopia, Ghana and Ivory Coast. The Group has also invested in the excess of US$1.7 billion into frontier public markets including Sub-Saharan Africa.

My take is that if an investment firm managing assets worth billions deems that Fidelity Bank is worth investing in, who are you to say otherwise and if so based on what evidence. It is good that Central Bank came out early to rubbish the rumours that the bank was to be closed down therefore bringing into the discourse.