Faulu licensed to take deposits

• CBK says nine more micro-financiers set to be given green light by year’s end

The government on Tuesday said nine deposit taking microfinance institutions would be registered by the end of the year.

Speaking during the official launch of the licensing of Faulu Kenya as a deposit taking institution, Central Bank governor, Njuguna Ndungu said the nine were at various stages of the approval process.

“There are 27 business names received and nine formal applications have been made and they are at various levels of application and its hoped that they will be completed by the end of the year,” said Prof Ndungu.

He said the principal and agents model, to be adopted in branchless banking will further entrench the banking services in the country.

The governor said the commercial banks would be involved in developing the model to be used by the public to access banking services through agents.

He said the unbanked population had reduced since 2009, and attributed this to the expansion of the platforms some of which leverage on the information communication technology.

According to FinAccess, a public-private partnership, the banked population increased to 22 per cent in 2008 compared to 18.9 per cent in 2006.

“This is a small increase, but significant step in making available banking services to more people in the country,” he said.

Mr Ndungu said the microfinance Act 2006, had led to increase in their activities saying they would play a great role in expanding banking services in the country.

He said the enactment of Sacco Act and creation of credit reference bureaus were some of the efforts meant to entrench the banking services in the country.

Faulu Kenya is the first deposit taking microfinance with branches across the country. It has 87 branches, two of which are offering fully-fledged banking services.

“We shall upscale our services to reach more people, with more innovative products,” said the chairman Ken Wathome.

Faulu Kenya currently has 220,000 clients, with a loan portfolio of Sh3.4 billion and targets 1 million clients in the next three years leveraging on the ICT platform.