NAIROBI (Xinhua) --
Kenya has started review of the law on
microfinance banking as it seeks to increase their role in
providing financial services especially to the increasing number
of small and medium scale enterprises, the Central Bank of Kenya
(CBK) has said.
Kenya has 13
licensed microfinance banks, with the number expected to
increase because of demand for services in the medium term.
CBK in its update
released on Monday called for public consultation on the changes
in law. Microfinance banks issued loans worth 430 million U.S.
dollars in 2017, an increase from 270 million dollars in 2013.
enactment of the Microfinance Act and Regulations in 2008, the
dynamics within the microfinance industry have changed
significantly with the industry experiencing growth and
transformation. Innovation and dynamism within the microfinance
industry has increased and the industry has experienced growth
in the number of customers and diversity in the range of
services and products provided,” according to the update.
CBK is credited with
taking several initiatives that have enabled the number of
Kenyans with access to financial services increase to 75 percent
by 2016, according to financial access consultancy group FSD
“Access to any form
of formal financial service has dramatically increased from
about 27 percent in 2006 to over 75 percent in 2016,” said FSD
Kenya in one of its studies.
Last year, Kenya was
ranked top among 26 countries in financial inclusion in a report
by Centre for Technology Innovation at U.S-based Brookings
In addition to
licensing of mobile money services like M-Pesa in 2008, which is
now being used by 30 million Kenyans, CBK started regulating
microfinance banking in the same year in what it says was to
“provide a platform for the broadening and deepening of access
to financial services throughout Kenya, especially to the
low-income populace and small and medium enterprises in urban
and rural areas.”
“To support the
rapid growth of the microfinance banking industry, the existing
microfinance legislative and regulatory framework calls for
considerable review to suit the industry’s current realities,”
noted the CBK update.
CBK called on the
stakeholders in the industry to present their views of the
proposed new law and regulations by March 15, to be incorporated
in the comprehensive review that will be undertaken in