, NAIROBI, Kenya, May 13 -The Central Bank of Kenya (CBK) has granted a license to U&I Deposit Taking Microfinance Limited to carry out community deposit-taking microfinance business.
The license has been issued pursuant to Section 6 (1) of the Microfinance Act, 2006 and Regulation 5 (3) of the Microfinance (Deposit-Taking Microfinance (DTM) Institutions) Regulations, 2008.
U&I becomes the ninth deposit taking microfinance institution to be licensed. Others include Faulu Kenya, Kenya Women Finance Trust (KWFT), SMEP, REMU, Rafiki, Century and SUMAC and community-based, Uwezo DTM.
U&I, which is the second community DTM to be licensed under the Microfinance Act is a wholly-owned Kenyan company limited by shares.
Previously, the entity was engaged in credit only microfinance business before they transformed to a community DTM.
The DTMs primary focus is the Micro and Small Enterprises (MSEs) as well as the financially excluded populations.
It is reported that micro, small and medium enterprises (MSMEs) and the informal sector represent over 90 percent of private businesses and contribute to more than 50 percent of Gross Domestic Product (GDP) and account for about 63 percent of employment in most African countries.
Despite these opportunities, they face many challenges, including access to finance, which is often considered to be the most significant.
CBK has initiated reforms to develop effective legal, regulatory and supervisory frameworks that support innovations to enhance the development of MSME financing and growth which are key tenets of Vision 2030.