page_title: Microfinance in Kenya
section_title: Existing regulations
hierarchical_section_title: Microfinance in Kenya / Existing regulations
caption_attribution_description: English: Central Bank of Kenya
context_page_description: Microfinance in Kenya consists of microfinance facilities and regulations in Kenya which has been developing since the mid 1990s. Legislation was passed in 2006 with the Micro Finance Act which became active in 2008. By 2010 there were 24 large micro finance institutions in Kenya, which provided US $1.5 billion to approximately 1.5 million active borrowers. With over 100,000 clients, Equity Bank Kenya had the largest share of business loans representing market share of 73.50% followed by Kenya Women Microfinance Bank with 12.06%. Most microfinance firms as in other countries have eligibility criteria which may include gender, age, a valid Kenyan ID, a business, an ability to repay the loan and be a customer of the institution.
  Corruption is a major problem in Kenya. In 2010 Kenya ranked 154th on the International Corruption Index. Political riots such as during elections in year 2007, which led to violence and economic disturbance. As a result of this political risk, the Portfolio at Risk rate increased during the riots during the elections in 2007.
context_section_description: The banking system in Kenya is regulated by the Companies Act, the Banking Act, and the Central Bank of Kenya Act. In addition, there are several existing guidelines. The responsibility for monetary policy and the banking system is held by the Central Bank of Kenya, which also releases information about interest rates, banking guidelines, and the financial institutions.
  The Kenyan Micro Finance Act was adopted in 2006 and became active in 2008. With the adoption of this act, institutions could apply for micro finance licenses at the Kenyan Central Bank either as a national or community institution.
  In order to do so, these institutions must be registered as:  
  deposit-taking institutions
  non deposit-taking institutions
  informal organizations (supervised by an NGO)
  The four steps of approval for a micro finance institution are:
  Approval of name
  Application for license
  Letter of intent
  Issuance of license
caption: Central bank of Kenya
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