In Kenya, existing regulations require financial institutions to build brick and mortar branches. Changes to these regulations will permit the establishment of branchless or agency banking.
The Central Bank of Kenya (CBK) is in the process of reviewing its regulations to allow for the formation of agency banking, by which non-financial institutions will be allowed to offer financial services on behalf of both commercial banks and microfinance institutions (MFIs). This change is expected to provide MFIs the leverage to extend their reach while minimizing costs. Agency banking is expected to transform the industry by offering financial services through devices such as point of sale (POS) terminals that can be used at the customers’ doorsteps. In support of the changes, Chairperson of the Association of Microfinance Institutions of Kenya (AMFIK) Lydiah Koros recently stated, “The establishment of branchless banking will allow us to reach more people, especially in the rural areas where the majority are unbanked.”
About Association of Microfinance Institutions of Kenya (AMFIK):
The Association of Microfinance Institutions of Kenya (AMFIK), is an umbrella organization for Kenyan microfinance institutions (MFIs), which was established in 1999 in order to strengthen Kenyan MFIs’ lobbying efforts with respect to government policy formation and to aid local MFIs in networking with other local and international organizations. AMFIK website: http://www.amfikenya.com/
About Central Bank of Kenya (CBK):
Established in 1966, the Central Bank of Kenya is the central banking authority. In 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 Ndung’u was appointed Govenor of Central Bank in March 2007. CBK website: http://www.centralbank.go.ke
Bibliography:
AMFI: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Association+of+Microfinance+Institutions+of+Kenya+%28AMFIK%29
CBK: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Kenya+%28CBK%29
Additional Resources:
[1] Original article: http://www.businessdailyafrica.com/-/539552/850678/-/6b6u96/-/
[2] Related article: http://www.capitalfm.co.ke/business/Kenyabusiness/Kenyan-MFIs-ready-for-agency-banking-3702.html
Similar Posts:
- MICROCAPITAL BRIEF: Non-performing Loan (NPL) Ratios Up Among Microfinance Providers in Bangladesh
- MICROCAPITAL BRIEF: Ebanx Acquires Payment Initiator License, Accessing Pix to Simplify E-commerce Purchases in Brazil
- MICROCAPITAL BRIEF: Cambodia Microfinance Association, NBC Launch Project to Increase Financial Literacy, Consumer Protection
- MICROCAPITAL BRIEF: Moniepoint Microfinance Bank Launches Mobile Banking App, Debit Card in Nigeria
- MICROCAPITAL BRIEF: World Bank ARISE Program Includes $230m Loan for Farmers in Ukraine
