NAIROBI, Kenya, Apr 7- The Central Bank of Kenya (CBK) has granted a licence to Kenya Women Finance Trust to carry out nationwide deposit-taking microfinance business.
KWFT becomes the second nationwide deposit-taking microfinance organisation to be accredited after Faulu Kenya Deposit Taking Microfinance Ltd which was licensed in May 2009.
“The Licence has been issued pursuant to Section 6(1) of the Microfinance Act and Regulation 5(3) of the Microfinance (Deposit-Taking Microfinance Institutions) Regulations, 2008,” read a statement from the CBK.
The licensing of Kenya Women Finance Trust marks a major milestone in the microfinance sector and the financial sector at large and is particularly a major achievement for the women given that KWFT currently provides credit to over 334,000 women clients. The transformation to a deposit-taking microfinance institution will enable KWFT to diversify and increase its products range to offer savings products to its clients in addition to the loan products.
Since the Microfinance Act and its attendant regulations came into effect on May 2, 2008, the Central Bank has in total approved 34 business names, which is the first step in the licensing process. In addition to the two that have been licensed one applicant has been issued with a letter of intent, while seven other applications are at various stages of review and appraisal by the Central Bank.
Regulation of the microfinance sector brings with it the overarching benefit of instilling public confidence in microfinance institutions. This is a necessary prerequisite for moving the microfinance sector to new frontiers of financial reach through mobilisation and intermediation of public deposits.
Depositors of licensed deposit taking microfinance institutions are protected by the Deposit Protection Fund Board which is an important safety net for depositors and it enhances their confidence in the licensed firms.
The Central Bank has pledged to continue developing policies, procedures, as well as innovative solutions that will benefit the financially underserved segments of the Kenyan populace.
“Central Bank takes this opportunity to underscore, the important role of the microfinance industry and assures the industry and all players of its continued support in the development of the microfinance industry,” the statement further said.