From American Banker (subscription required) By VICTORIA FINKLE July 3, 2014 Last year's push by some...
(enacted in 2006)
The Microfinance Act of 2006 regulates the provision of microfinance in Kenya. The act applies to deposit-taking institutions; parts of the act may be declared applicable to non-deposit-taking institutions in the future.
The act addresses the following topics:
- Definitions for “deposit-taking microfinance businesses” and “non-deposit taking microfinance business” in Part I, Section 2;
- Licensing provisions:
- Qualifications for carrying out deposit-taking microfinance business;
- Application, issuance, renewal, revocation and restriction of license;
- Provisions related to governance:
- 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; and
- Regulations and transitional provisions.