Central Bank grants licence to new micro-finance bank

CREDIT: Central Bank of Kenya has granted an operational licence to Muungano Microfinance Bank (MMFB), in a move that will see more funds directed to rural areas.

The licence will enable the bank to carry out community-based microfinance banking business. The bank which will be based in Kangari, Murang’a county will be the first one to set up its head office and operations outside Nairobi. 

Currently, Kenya has 13 microfinance institutions which had Sh41 billion in customer deposits by December 2018, being a 5.3 per cent rise from Sh38.9 billion reported in 2017.

The licence has been issued pursuant to Section 6 (1) of the Microfinance Act, 2006 and Regulation 5 (3) of the Microfinance Regulations, 2008. 

Speaking after the special Kenya Gazette notice, Central Bank of Kenya (CBK) Governor Patrick Njoroge said MMFB is now free to carry out banking business effective October 30.

Chairman of the bank, Patrick Karanja said the institution will fill an existing gap within the financial service sector in Murang’a county.

He said this will be achieved by offering an appropriate mix of savings and credit products to the target clients.  

“We intend to target the rural small-scale farmers in Kigumo sub-county, through value chain financing,” said Karanja.