SMEP gets the nod to take deposits

April 5, 2011
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, NAIROBI, Kenya, Apr 5 – The Central Bank of Kenya (CBK) has licensed the fifth deposit-taking microfinance institution in the country as it continues on its path to widen the reach of financial services to the populace.

CBK Governor Professor Njunguna Ndung’u said the licensing of the Small and Micro Enterprises Programme Deposit Taking Microfinance (SMEP) will enable it to offer more financial products and thus enhance its outreach.

“We have six applications that are in the advance stage, and 25 applications in various stages. So, if we are lucky then we may see another six licensed by the end of this year. The law now allows commercial banks to share information. We had not included microfinance in the initial amendment. That is why we are re-amending it for microfinance to allow for credit information sharing,” prof Ndung’u said.

Speaking during the launch of the firm, the governor said the sector has recorded a huge growth in the last few years with a branch network of 44 opened, 800,000 deposit accounts mobilised and Sh16.6 billion worth of loans advanced.

“Since you have the numbers already, it is your turn to reduce the unit amount. But if you open up the data a lot more, you will find that micro accounts have increased from 2.55 million in 2007 to 11.25 million by December last year. So you can see it is the micro accounts that we should be concentrating on to open up for more accounts to be opened and Vision 2030 achieved.”

Prof Ndungu reiterated the CBK’s commitment to continue reducing the entry barriers for the millions of Kenyans who are excluded from the formal financial sector.

SMEP is a Christian organisation committed to improving the living standards of Kenyans through the provision of affordable credit and non-financial services by mobilising resources.

Chief Executive Officer Phyliss Mbungu said “in addition to to giving out credit, SMEP will now be able to safeguard their customers’ hard earned money through already set-up deposit taking branches as well as mobilising saving from the public for lending. Which means, in the long run customers will enjoy lower borrowing interest rates.”

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