Old Mutual Backs Faulu’s Digital Reset with Sh1.2bn as New Core Goes Live
Fresh shareholder capital and a ten-month replacement of Faulu’s legacy core and digital channels have landed together. The next test is converting that investment into stronger customer activity and a return to profitability.
Two announcements, published three days apart, reveal the scale of Faulu Microfinance Bank’s current reset.
On 15 August, Business Daily reported that Old Mutual had injected an additional Sh1.2 billion into Faulu. The capital is intended to support technology investment, service expansion and the bank’s focus on micro, small and medium-sized enterprises.
On 18 August, MuRong Technology announced that Faulu’s new core banking system and digital channels had gone live after just ten months. That delivery window is exceptional for a transformation of this scale. Comparable core banking replacement programmes can run for three to four years, particularly when they involve data migration, multiple third-party integrations and the simultaneous renewal of customer channels. Faulu’s programme replaced the legacy core while bringing core processing, digital lending and ATM, POS, web, mobile app and USSD services onto a modern technology foundation. For MuRong, the go-live is a significant African delivery milestone and a practical demonstration of its ability to execute complex, end-to-end banking transformation at speed.
Read together, the announcements show Old Mutual addressing two different constraints at once: the capital available to support Faulu’s strategy and the technology required to execute it.
Capital Arrives at a Critical Point
Old Mutual acquired its majority interest in Faulu in 2015 and holds a 60.66 percent stake. Faulu remains Kenya’s largest microfinance bank by market share, accounting for 35.7 percent of the segment at the end of 2024, according to figures cited by Business Daily.
The bank reported Sh1.33 billion in core capital at the end of December 2025, compared with a minimum requirement of Sh60 million. That was about 22 times the regulatory minimum based on the published figures. The reports do not state how much of the new Sh1.2 billion will be recognised as regulatory core capital, so the two figures should not simply be added together.
A Larger Buffer, with a Specific Execution Purpose
The fresh shareholder funding follows an already sizeable reported core-capital position. The commercial question is how effectively it is deployed.
The urgency is visible in Faulu’s earnings. The lender has not reported a profit since 2019. Its net loss reached Sh1.42 billion in 2023 before narrowing to Sh1 billion in 2024 and Sh496.36 million in 2025.
Faulu’s Loss Has Narrowed, but the Turnaround Is Incomplete
Reported annual net loss, shown in Kenyan shillings.
The Technology Change Is Broader Than a Core Upgrade
MuRong’s implementation replaced Faulu’s legacy core banking environment with MuRong M5 and introduced MuRong IDO as the integration and digital-channel platform. The work was completed in ten months.
The new environment supports core banking services and digital products, including online lending. Customers can access services through ATM, POS, web, mobile app and USSD channels. That mix is important for a microfinance bank serving both digitally active customers and people who still rely on assisted or feature-phone access.
The project also integrated dozens of existing systems and external services. Named connections include cheque clearing, SWIFT, RTGS, EFT, M-PESA and PesaLink. Legacy data was migrated through a managed cutover intended to preserve stability and service continuity.
From Core Processing to Customer Channels and Payment Rails
A simplified view of the capabilities described in MuRong’s go-live announcement.
Why Capital and Technology Need to Move Together
A core replacement can improve the bank’s ability to configure products, connect partners and automate processes. Fresh capital can fund implementation, absorb transition costs and support lending growth. The commercial value appears only when the two translate into better operating and customer outcomes.
Faulu has said it is moving toward automated loan origination, configurable approval routing and tighter disbursement controls. Those capabilities are especially relevant to MSME and microfinance lending, where faster decisions must still be balanced against affordability checks, fraud controls, portfolio limits and collections discipline.
The new platform also gives Faulu a broader distribution base. Mobile app and web channels can serve digitally active customers, while USSD, POS and ATM access preserve reach across different devices and service preferences.
Technology can shorten product-release cycles and reduce manual work, but it does not repair a loan book or create active customers by itself. Faulu’s next phase is therefore less about the go-live and more about adoption, credit performance and operating execution.
Six Measures That Will Show Whether the Investment Is Working
The strongest evidence will come from operating and customer outcomes, not the completion of the technology programme itself.
Active mobile, web and USSD users, transaction frequency and the share of customers using more than one service.
Time from application to decision and disbursement, including the level of manual intervention.
Arrears, non-performing loans, write-offs and collection performance across new digital lending cohorts.
Platform availability, failed transactions, reconciliation breaks and customer complaints after migration.
Cost-to-income performance, process automation and the reduction of duplicate or manual work.
New active MSME customers, repeat borrowing, deposits, payment activity and relationship profitability.
The Go-Live Starts the Commercial Test
Faulu enters its next phase with stronger shareholder backing and a new core and digital-channel platform. That combination gives the bank more room to improve service, automate lending and reach customers through multiple channels.
The remaining task is measurable: convert that capacity into active customers, disciplined credit growth, lower operating friction and a return to profitability.
