NAIROBI, Kenya, Jan 12- The Central Bank of Kenya (CBK) has licensed the fifth deposit taking microfinance institution as it continues to demonstrate its commitment to building an all inclusive financial system in the country.
Remu DTM is the latest entrant into the deposit-taking microfinance business and is expected to contribute towards promoting competition, efficiency and outreach in the banking sector.
"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.
This announcement will be good news especially to Small and Medium Enterprises that will now be able to access loans products to finance their firms\’ development.
The licensing of Remu follows that of Faulu Kenya and the Kenya Women Finance Trust Deposit Taking Microfinance in April last year, which was hailed as a major achievement for the women of Kenya given that the institution currently provides credit to over 334,000 women clients.
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.
With these regulations, the microfinance sector has grown as a new frontier of financial reach through mobilisation and intermediation of public deposits.
According to the CBK, the country currently has a branch network of 42 microfinance outlets which had mobilised deposits worth Sh7.9billion as November 2010 and a total loan portfolio of Sh17billion.
"The total number of active deposit accounts and loan accounts stood at Sh1.01million and Sh600, 000 respectively during the same period," CBK added.
Through the use of these institutions, CBK is confident that the financial inclusion gap, which shows that 32.7 percent of Kenyans lack access to financial services, will be bridged.