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Population (millions) |
31.3 |
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Gross domestic savings (% of GDP) |
8.7% |
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% Population under $2/day (PPP) |
59% |
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Size of informal sector |
4.6 million, contributes 18.4% of GDP |
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Regulated microfinance institutions |
K-Rep Bank, Family Finance Building Society, Equity Building Society, Co-op Bank |
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Non-regulated sources of microfinance |
NGO; Credit only MFIs, ROSCAS |
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Predominant informal finance mechanisms (ROSCAs, tontines, etc.) |
ROSCAs, moneylenders |
» More country data from the Microfinance Information Exchange Market
General Approach to Regulating
Based on the Comparative Database on Microfinance Regulation by the IRIS Center of the University of Maryland|
MFIs |
Commercial Banks |
SACCOs |
NGOs | |
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Definition or description of institution |
Institutions that offer thrift and small credit to MSEs. |
Institutions that offer financial services, intermediation, loan facilities, and savings services |
Member based and offer credit facilities to its members |
Institutions that offer various services and financial charity services |
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Guidelines & restrictions on financial Services |
Permitted: savings and credit Prohibited: checking, foreign exchange, foreign trade, current accounts, capital investment, wholesale and retail trade, securities, mortgage finance |
Permitted: deposits, loan facilities, checking and payment services, foreign exchange, management, investments Prohibited: wholesale and retail trade, |
Permited: savings and lending Investments |
Permitted: loans and other charitable services |
» Download Country Profile of Microfinance Regulation
Adapting ROSCA Methodology for Savings and Credit Self-Help: The KEPP Ngumbato Savings Initiative, 2004
By William Steel
This paper presents the distinguishing features of the Kenya Entrepreneurship Promotion Program (KEPP), initiative based in Kenya. At present, KEPP facilitates 61 groups with about 1400 members. The author also touches on the subjects of sustainability and outreach regarding this particular program.
Key points of this paper are:
- KEPP is a methodology based on ROSCAs where the sum of money raised at each meeting has to be borrowed by one of the members for a fee (10% for one-month loans).
- KEPP is only a facilitator and does not mobilize any funds. Originally, it did not charge the self-help groups for the facilitation and training services, which was paid by donors.
- At the moment, it charges 1% of accumulated savings to each self-help group. This amount could make the organization self-sustainable, according to the author.
- In order to serve a larger base of clients, KEPP would need to raise grant funds.
Equity Building Society: A Domestic Financial Institution Scales up Microfinance, 2004 (604 KB, PDF)
By Tamara Cook
Equity Building Society (Equity) is a homegrown success story that has only recently attracted international attention. Equity's beginning, 20 years ago, was inspired by an entrepreneurial vision of a potential demand for financial services in the underserved, low-income population of Kenya. Despite high hopes for serving this market, the first 10 years were characterized by a difficult environment, fierce competition, and a lack of institutional knowledge of how to operate a profitable financial institution. On the verge of collapse in 1993, Equity brought in outside experts and committed to radical steps to turn the institution around. This commitment led to improved financial performance and increased outreach. Since 1993, Equity has grown from 12,000 depositors to more than 250,000 depositors (as of December 2003), making Equity Building Society home to more than 13 percent of all bank accounts in Kenya.
Designing Savings: Equity Building Society's Jijenge Savings Account, 2003 (744 KB, PDF)
Written by: Graham Wright, p.29
There are no magic formulas for designing appropriate savings products for poor people: it requires market research and careful, systematic product development. But the rewards for the MFIs that undertake these exercises in terms of profits and client loyalty can be remarkable, and well worth the investment. The paper gives example of Equity Building Society and its Jijenge savings account - a contractual savings product with an emergency loan facility attached.
The client defines the length of the contract and the periodicity of the deposits (weekly or monthly). A premium interest rate is offered to those who take out longerterm contracts but there are quite significant penalties for premature withdrawals from the account. Finally, all Jijenge savings account holders have guaranteed, immediate access to an emergency loan of 90 percent of the value of the amount in their Jijenge savings account on demand.
See also: Equity Building Society's Market-led Approach to Microfinance, 2004
Written by: Graham A.N. Wright and James Mwangi
Equity Bank of Kenya
From 2001 to 2004, Equity Bank of
was able to achieve this quality and breadth of free promotion and
uses mobile units to expand its outreach to rural areas that are not served by other commercial institutions.
This case study can be found in Savings Operations for the Poor: An Operational Guide, edited by Madeline Hirschland, forthcoming from Kumarian Press (
Kenya Post Office Savings Bank: A Variety of Products
Summarized from: Graham A.N. Wright, A Critical Review of Savings Services in Africa and Elsewhere, MicroSave, 1999
By Graham A.N. Wright (author of the study); case study authors: Kamewe and Readcliffe
Description of seven major savings products that KPOSB offers through its network of 493 outlets (compared to a total of 370 operated by commercial banks):
- Ordinary Savings Scheme (OSS)
- Save as You Earn (SAYE)
- Fixed Deposit Scheme (FDS)
- Premium Bond (PB)
- Premium Savings Account (PSA)
- Children's Savings Account
- Trust Account
See also:
Reinventing Postal Savings Institutions in Africa: A New Role as Large-scale Microfinance Providers, 2005, by Kamewe, H.
Financial sector reforms, savings, and economic development in Kenya, 2002, Odhiambo, N.
Use and Impact of Savings Services in Kenya, MicroSave, 1999, Mugwanga, E.