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Overview of Regulatory Environment |
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| In Kenya, financial institutions involved in microfinance include formal institutions (banks, non-bank financial institutions, licensed Savings and Credit Cooperatives (SACCOs)); semi-formal institutions (unlicensed SACCOs, non-governmental organizations); and informal institutions (Rotating Credit and Savings Associations (ROSCAs) and moneylenders). Deposit-taking MFIs are regulated by the Central Bank under the Microfinance Act. Regulations for licensing and supervising non-deposit taking financial institutions are under discussion. Under the SACCO Societies Act, SACCOs are to be regulated by the SACCO Societies Regulatory Authority (SASRA) which has established a board and is expected to begin operations and issue regulations in 2010. Recent legislation has been passed related to branchless banking, including the following: Finance Act 2010, which amends the Banking Act and Microfinance Act to allow for use of agents; Proceeds of Crime and Money Laundering Bill 2009 (expected to become operational in June 2010); and Guideline on Agent Banking. |
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Read this INFORMATIVE PROFILE of the legal and regulatory environment for microfinance in Kenya from the Comparative Database on Regulation and Supervision. |
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Financial Regulator |
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| Central Bank of Kenya (CBK) | ||
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Recommended Reading |
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Regulation and Supervision of Microfinance Institutions in Kenya Omino, G. (2005) Essays on Regulation and Supervision No. 1 |
| » | Microfinance development in Kenya: K-Rep's transition from NGO to diversified holding company and commercial bank Rosengard, J., A. Rai, A. Dondo, and H. Oketch (2000) Cambridge, MA: Harvard Institute for International Development |
| » | Update on Regulation of Branchless Banking in Kenya CGAP (2010) |
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| Banking Act (as amended through 2010) | ||
| Central Bank of Kenya Act (as amended through 2009) |
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| Finance Act, 2010 | ||
| Microfinance Act, 2006 | ||
| SACCO Societies Act, 2008 | ||
| Cooperative Societies Act (Amended) 2004 | ||
| Non-Governmental Organizations Co-ordination Act, 1990 | ||
| Microfinance (Categorization of Deposit Taking Microfinance Institutions) Regulations, 2008 | ||
| Microfinance (Deposit Taking Microfinance Institutions) Regulations, 2008 | ||
| Banking (Credit Reference Bureau) Regulations, 2008 | ||
| Laws and Regulations Related to Branchless Banking | ||
| Guideline on Agent Banking (CBK/PG/15), 2010 | ||
Related Links |
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| Enterprise Survey: Kenya Snapshot of how firms view the effect of economic and regulatory policies on growth, productivity and efficiency (World Bank/International Finance Corporation) |
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| FIRST Information Exchange: Kenya Individual country information on financial sector donor projects, a brief description of the financial sector, and links to financial sector reports and diagnostics from international organizations. (Financial Sector Reform and Strengthening Initiative) |
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