Professor Njuguna Ndungu, the Governor of the Central Bank of Kenya (CBK), has announced that CBK will review the Micro Finance Act that came into effect in May of 2008.The act was intended to regulate the microfinance industry through licensing and supervision. According to Professor Ndungu, proposed changes would make it less expensive for the general public to acquire funds from microfinance institutions (MFIs). He also commented that MFIs have thus far had trouble complying with the act’s provision that a single shareholder can make up at most 25 percent of an MFI’s shareholder capital. Finally, Professor Ndungu stressed the importance of deposits for the financial future of MFIs as funding from traditional sources becomes less reliable.

By Christopher Maggio, Research Assistant

About:
Central Bank of Kenya (CBK)

Description:
Established in 1966, the Central Bank of Kenya is the central banking authority of Kenya. With the microfinance regulations taking effect in May 2008, the Central Bank of Kenya operationalized the Microfinance Act of 2006. The Act paved the way for the licensing of microfinance institutions (MFIs) that take deposits from the public. Prof. Njuguna Ndungu was appointed Governor of the Central Bank of Kenya in March 2007.

Organization’s Website:
http://www.centralbank.go.ke/

Contact Information:
Haile Selassie Avenue,
P.O Box 60000-00200,
Nairobi, Kenya
tel/fax: +254 20 2860000

Additional Resources:
Kenya Broadcasting Corporation article entitled ‘CBK to review Micro Finance Act’: http://www.kbc.co.ke/story.asp?ID=62392

MicroCapital’s Microfinance Universe profile: CBK