Central Bank of Kenya to Review Microfinance Act
Njenga, L.

The Central Bank of Kenya (CBK) has announced plans to review the Microfinance Act that came into effect in May 2008. According to CBK Governor Professor Njuguna Ndungu, the amendments will make it cheaper for the public to access funds from MFI agents.

Ndungu said it was vital for the microfinance sector to have new frontiers of financial reach through mobilization of public deposits adding that traditional donors are drying up and cannot be relied on to move the sector to the next level.

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24 Feb 2010

CBK and MFIs regulations

I certainly believe MFIs need regulation to oversee the unregulated transactions and control of lending and lending rates. Most MFIs operating countries are looking for suitable laws, which protect the beneficiaries and Micro level MFIs rather than Macro level. Microfinance institutions are intended to be the poor's financial organizations. This has to remain, but regulation could prevent the poor from reaching to MFI’s unless authorities have educated them on the Act. Act also can include 1. How to safe guard the beneficiaries 2. Safe guarding MFIs micro sustainability 3. Regulating on lending criteria’s in order prevent over supply of loans to individuals 4. Building National Monitory institutional supervision on MFIs operational, Financial Strategies and Auditing. 5. Act on criteria on members of the Board directors in MFIs 6. Think how to control the interest rates. My concern is control measures on partnerships and franchise in MFIs industry. The concept of franchise needs further research on how it will incorporate into MFI activity.

Isha Wedasinghe Miranda MFI Consultant & M&E specialist Sri Lanka

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