Kenya: Microfinance Act, 2006

This act regulates the provision of microfinance in Kenya. The Act was enacted on December 30, 2006. The Act applies to deposit-taking institutions; parts of the Act may be declared applicable to no-deposit-taking institutions in the future. The Act addresses the following topics:

• Licensing provisions. These include:
  • Qualifications for carrying out deposit-taking microfinance business;
  • Application, issuance, renewal, revocation and restriction of license;
     
• Provisions related to governance, such as:
  • Minimum capital requirements and minimum liquid assets;
  • Prohibited activities;
  • Application for and limits on loans and credit facilities;
  • Submission of accounts to the Central Bank;
  • Provisions regarding the appointments and qualifications of an external auditor;
     
• Supervision by the Central Bank that includes:
  • Inspection of institutions;
  • The power of the Central Bank to intervene in management;
     
• Protection of deposits, including:
  • Liquidation of an institution by the Central Bank;
  • Rights of the Board on insolvency;
     
• Miscellaneous provisions that cover:
  • Default by officers or employees;
  • Regulations and transitional provisions.