CBK licenses the sixth deposit-taking micro-finance institution

 By Morris Aron

Central Bank of Kenya licensed Rafiki Deposit Taking Microfinance (K) Ltd to carry out nationwide deposit-taking microfinance business. The move brings the number of such institutions to six.

Of the six, Rafiki DTM is the first such institution to be wholly owned by a commercial bank – Chase Bank is a shareholder – licensed under Section 4(1) of the Microfinance Act. This allows commercial banks or financial institutions to establish wholly owned subsidiaries to carry out deposit taking microfinance business.

The granting of the licenses now allows Rafiki DTM to undertake a countrywide deposit taking, and joins four nationwide and one community-based deposit taking microfinance institutions.

Rafiki will have its head office  in Nairobi, and flagship branches in Nairobi and Mombasa.

CBK has taken a robust decision to embark on deepening financial inclusion to boost the number of the un-banked population and bring them to the mainstream financial system.

“The growth of the microfinance industry is at the core of enhancing financial inclusion,” said CBK governor Prof Njuguna Ndung’u in a statement.

“The promotion of livelihoods through access to finance will go a long way in achieving.”

Statistics indicate that as of  April,  deposit taking microfinance institutions had 47 branches nationwide.

Further, DTM has mobilised deposits worth Sh9 billion, with had a total loan portfolio value of Sh15 billion.

The number of active deposit accounts and loan accounts stood at 1.3 million and 0.5 million.