CENTRAL BANK OF KENYA
MAISHA MICROFINANCE BANK OFFICIAL LAUNCH
Chester House, Nairobi, Thursday, 22nd September 2016
Mr. Mohammed Nyaoga, Chairman of Central Bank of Kenya
As Prepared for Delivery
Dr. Beatrice Sabana – The Chairperson, Maisha Microfinance Bank;
Mr. Ireneus Gichana– The Chief Executive Officer, Maisha Microfinance Bank;
The Members of the Board, here present;
The Management;
Distinguished Guests;
Ladies and Gentlemen:
It is an honor to have been invited to be part of this momentous occasion to mark the official
launch of Maisha Microfinance Bank Limited. At the onset let me applaud the founding
shareholders and Directors of Maisha for their resolute commitment to ensure that their vision
eventually translated into reality.
Ladies and Gentlemen: The licensing of Maisha as a nationwide microfinance bank (MFB) on
21st May 2016 brings the total number of microfinance banks in Kenya to 13. Nationwide
Microfinance Banks have authority to operate across the country which enhances financial
services outreach to the underserved population. Maisha MFB seeks to enhance the Microfinance
sector by offering comprehensive Insurance Premium Financing (IPF) products as value-add
alongside other Micro Small and Medium Enterprises (MSMEs) financing products. This will
help improve not only financial inclusion in Kenya but also insurance access and penetration.

Ladies and Gentlemen: The formalization of the microfinance industry started in 2006 with the
enactment of the Microfinance Act. The Act which was operationalized in 2008 empowered the
Central Bank of Kenya (CBK) to license and regulate Microfinance Banks. Since the licensing of
the first MFB in May 2009, the industry has achieved remarkable growth. As at June 2016, the
total branch network for Microfinance banks was 110 branches across the country and 92
marketing offices. During the same period the microfinance banks registered a growth of 8.9 per
cent in total assets from Ksh. 66.1 billion in June 2015 to Ksh. 72.0 billion. The loan portfolio
amounted to Ksh. 47.4 billion and deposits amounted to Ksh. 40.4 billion. The deposits therefore
accounted for 85 per cent of total funding, an indication that the MFBs are able to fund a large
proportion of their loan portfolio using customer deposits.
To support this growth, ladies and gentlemen, CBK in partnership with the industry players
continues to create an enabling environment by initiating and supporting notable reforms that
further mainstream the microfinance industry. For instance, in 2010, the Microfinance Act was
amended to extend credit referencing and use of agents to Microfinance Banks. This was
followed closely by the development of regulations and guidelines on credit referencing and
agency model for Microfinance Banks in 2011. As at December 2015, three microfinance banks
had contracted a total of 1,154 agents.
The scope of financial services offered by microfinance banks was further expanded in 2013.
Through the amendment of the Microfinance Act, Microfinance Banks are now able to do some
of the prior prohibited activities, including – issuing of third party cheques, opening of current
accounts, and transaction of foreign exchange business. It is through the same amendment that
the name changed from Deposit Taking Microfinance Institutions to Microfinance Banks.
Ladies and Gentlemen: The journey however has not been without its challenges. MFBs took
some time to be viewed as deposit mobilisers given their long standing credit extension
orientation. Their customers viewed them as providers of credit while commercial banks
provided payments and other banking services. The slow pace of deposit mobilization saw MFBs
continue to rely on expensive lines of credits from commercial banks and other financiers. But
with concerted branding, marketing and expansion of distribution channels, MFBs are beginning
to attract deposits. Over time scaled up deposit mobilization will reduce reliance on expensive
credit lines. It is my expectation that this will in turn lead to lower interest rates and charges for
MFB customers.

It is important to note, ladies and gentlemen, that Maisha MFB is joining the financial sector at
a time when it is undergoing transformative changes which seek to enhance stability and
integrity. These changes are anchored on what the CBK is referring to as the “new normal”
whose pillars are; strong corporate governance, enhanced transparency and resilient business
models. This has been informed by the fact that in today’s dynamic world only those entities
with the highest levels of professionalism and ethics will be able to make great strides in growing
their business.
Integrity and professionalism improves the business brand and enhances both customers’
experience and employees’ job satisfaction. These in turn lead to higher returns for the
institution. We are confident that having gone through the rigorous vetting under the new normal
requirements that Maisha MFB is ready to set and maintain high corporate governance standards
in the financial sector. In addition, we encourage Maisha MFB and other regulated entities to
keep building and enhancing their business models to ensure resilience in this dynamic financial
sector environment.
In closing ladies and gentlemen: businesses especially MSME’s continue to decry the lack of
credit to fuel their growth engines. And where credit is available, it may not be affordable to the
MSMEs. Maisha therefore has an important role to play in financing the MSME’s that will
power Kenya’s take off and improve the quality of lives. I want to challenge you to offer
affordable financial services to your clients as this is the major hurdle faced by MSMEs in
Kenya.
It is now my distinct honour to declare Maisha Microfinance Bank officially open.
Thank you.