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Interest rate caps brings good fortunes for Caritas microfinance bank

Caritas was issued with a nationwide license by the Central Bank of Kenya (CBK) in June 2015 becoming the twelfth microfinance bank (MFB) in Kenya/FILE

NAIROBI, Kenya, Sep 27 – Church owned Microfinance Bank Caritas has hit Sh1 billion in assets after two years of operation becoming one of the fastest growing Microfinance banks in Kenya.

Caritas, which is owned by the Archdiocese of Nairobi Catholic Church, has grown its loan book from Sh11 million since its launch in April 2017 to over Sh700 million.

Speaking to Capital Business Chief Executive George Maina attributes the growth to interest rates capping that has seen Small and Medium Enterprises – who have experienced a credit crunch since the rate caps – rush to borrow from Microfinance Banks as well as use digital banking platforms.

“Currently about 80 percent our transactions are done on the mobile banking platform, SMEs have also turned to us after the Interest Rates capping,” he told Capital FM Business.

Maina says, going forward, the bank is targeting to enter other regions in the country that include, Nyeri, Kakamega and Embu.

“We envision having 12 branches and 200 agency outlets by the year 2020. We currently have 5 branches in Nairobi and Thika, with plans to open one more branch in Kiambu by the end of the year,” he added.

He said the bank is committed to serve the “unbanked and under-banked” sectors which account for about 25 percent of Kenya’s population.

The bank has also embarked on agency banking to increase its footprint. Currently, 16 agents have already received licensing from CBK.

By the end of the year, the bank plans to recruit 50 agents.

The bank has also partnered with the Cooperative Bank of Kenya for ATM and point-of-sale (POS) services, enabling its customers to have nation-wide access to their accounts Customers can make withdrawals at all Visa branded ATMs and purchase goods and services at all Visa-branded outlets.

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The institution’s roots are traced to the first Self-Help Group being established in 1983 in Kiriko Parish in Gatundu with the main objective of promoting self-reliance amongst the members.

The concept later spread to the other parishes within the Archdiocese of Nairobi.

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