Source: Bloomberg

Original article available here.

June 16 – Faulu Kenya Ltd. was granted a license by the central bank to accept deposits, the first microfinance institution in Kenya to receive such a permit.

As many as nine micro lenders are expected to receive similar licenses by the end of this year, Central Bank of Kenya Governor Njuguna Ndung’u told reporters today in the capital, Nairobi. Previously, the company wasn’t allowed to take money from the public and was only able to issue loans.

Faulu was among nine companies that have submitted formal applications to become deposit-taking institutions, Ndung’u said. The license was granted in terms of the Microfinance Act that came into effect in May 2008 and is expected to promote a culture of saving in Kenya, Ndung’u said.

Faulu currently has 87 branches and plans to increase this number using deposits collected from customers, Chairman Ken Wathome said, without providing further details. Within three years, the company plans to increase its customers to 1 million from 220,000, he said.

Faulu began operations in 1992 as a pilot micro-lending programme of Food for the Hungry International, a Geneva- registered non-governmental organization.

In April 2005, Faulu sold five-year bonds worth 500 million shillings ($6.4 million). The securities are traded on the Nairobi Stock Exchange.