Kenya: Chase Bank licensed to operate micro-finance institution ...

By In2EastAfrica - Sun Jun 26, 8:26 pm

Bank clients. Deposit taking micro-finance institutions are worth Sh9bn.

The Central Bank of Kenya (CBK) has licensed another micro-finance institution as it seeks to make financial services accessible to more people.

Rafiki Deposit Taking Micro-finance Kenya Limited, which is wholly owned by Chase Bank Limited, is also the first deposit-taking micro-finance (DTM) institution to belong to a commercial bank.

?Rafiki Deposit Taking Micro-finance Limited becomes the sixth deposit taking institution to be licensed following the licensing of four nationwide and one community-based deposit taking micro-finance institutions,? said Prof Njuguna Ndung?u, the CBK governor. The move would improve service to customers served by the institutions, he said.

?The emergence of commercial banks into the micro-finance arena will promote competition; enhance innovation, efficiency and outreach,? he said, adding that the growth of the institutions would boost financial inclusion.

The first such institution ? Faulu Kenya Deposit Taking Micro-finance Limited was licensed in May 2009 followed by Kenya Women Finance Trust Deposit Taking Micro-finance Limited, which was licensed in April 2010.

Uwezo Deposit Taking Micro-finance Limited ? the first community microfinance institution, which operates in Starehe division in Nairobi was licensed in November 2010. According to the CBK, the institutions can operate nationwide or as community based DTMs, the main distinction between the two being a minimum core capital requirement of Sh60 million and Sh20 million, respectively.

While a nationwide DTMs may establish operations in any part of the country, operations of a community DTM are restricted to specific administrative boundaries.

Small and Micro Enterprise Programme, a deposit taking micro-finance, was licensed in December last year followed by Remu, which was licensed in January this year.

Prof Ndung?u said that as at the end of April this year, the deposit taking micro-finance institutions had 47 branches nationwide, had mobilised deposits worth Sh9 billion with a total loan portfolio value of Sh15 billion.

The total number of active deposit accounts and loan accounts at the DTM?s stood at 1.3 million and 0.5 million, respectively.

By David Mugwe, Business Daily

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Source: http://in2eastafrica.net/kenya-chase-bank-licensed-to-operate-micro-finance-institution/

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