Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. List of Top Microfinance Institutions in Kenya. Microfinance includes microcredit, the provision of small loans to poor clients; savings and checking accounts; microinsurance; and payment systems, among other services. Microfinance services are designed to reach excluded customers, usually poorer population segments, possibly socially marginalized, or geographically more isolated, and to help them become self-sufficient. ID Ghana is an example of a microfinance institution.
Microfinance initially had a limited definition: the provision of microloans to poor entrepreneurs and small businesses lacking access to credit. The two main mechanisms for the delivery of financial services to such clients were: (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group. Over time, microfinance has emerged as a larger movement whose object is: “a world in which as everyone, especially the poor and socially marginalized people and households have access to a wide range of affordable, high quality financial products and services, including not just credit but also savings, insurance, payment services, and fund transfers.”
Proponents of microfinance often claim that such access will help poor people out of poverty, including participants in the Microcredit Summit Campaign. For many, microfinance is a way to promote economic development, employment and growth through the support of micro-entrepreneurs and small businesses; for others it is a way for the poor to manage their finances more effectively and take advantage of economic opportunities while managing the risks. Critics often point to some of the ills of micro-credit that can create indebtedness. Many studies have tried to assess its impacts.
New research in the area of microfinance call for better understanding of the microfinance ecosystem so that the microfinance institutions and other facilitators can formulate sustainable strategies that will help create social benefits through better service delivery to the low-income population.
Here is a List of Top Microfinance Institutions in Kenya
Kenya Women Microfinance Bank, formerly Kenya Women Finance Trust or KWFT, is a deposit-taking microfinance bank in Kenya, the largest economy in the East African Community. KWFT is a medium-tier financial services provider in Kenya. As of December 2013, it was the largest deposit-taking microfinance bank in the country, with an asset base valued at about US$220 million (KES:21.75 billion). At that time, the microfinance bank had in excess of 600,000 deposit accounts and a loan book of approximately US$147 million (KSh:14.53 billion), and shareholders’ equity valued at US$29.5 million (KShs:2.9 billion).
The company was established in 2008, as Kenya Women Finance Trust (KWFT), a 100% subsidiary Kenya Women’s Holding (KWH). In 2010, the institution was authorized to accept customer deposits, thereby becoming a deposit-taking microfinance institution. It changed its name to Kenya Women Microfinance Bank and became regulated by the Central Bank of Kenya (CBK). In order to comply with CBK regulations, KWH began to sell shareholding to the KWFT Board, staff, and foreign institutions. In July 2015 it sold 25% equity to 60,974 KWFT members, thereby reducing its own shareholding to the required 25% maximum.
Faulu is another big deposit-taking microfinance institution. Currently, it is the leading institution when it comes to giving microloans. Faulu has branches scattered all over the country to access customers. Also, with Faulu, customers can deposit their accounts through Mpesa.
Loans from Faulu are easily accessed. The loans are processed within 24 hours, and the interest rates are amicable. One can perform transactions on Faulu at any Faulu branch, Faulu agent, or ATM within the country.
Faulu headquarters is located along Ngong Lane, off Ngong Road in Nairobi.
Uwezo Microfinance started in 2008 and in 2015 received a nationwide license as a deposit-taking microfinance institution to bridge the gap left between commercial banks and the general public. It provides both loans and savings services. The institution offers short-term loans at flexible interest rates. The microfinance has over 30,00 active customers, both via the branch network and through the mobile lending platform whose aim is to ensure financial inclusivity.
The institution offers loans on car log books, farming, emergency loans and facility for savings and deposits.
This is one of the youngest Institutions on the market. The letter “M” in Musoni stands for Mobile since it is centered around Mobile banking. Currently, it stands as the most paperless Microfinance institution on the market.
With Musoni, there are no hidden charges when registering. The loans are processed within 72 hours and deposited into your account on loan applications.
This is one of the biggest Community-based Microfinance Institutions. The Choice headquarters is located in Rogai Kajiado county. The institution offers services such as loans and savings.
Examples of Choice Microfinance’s savings are the Faidikeni Fixed deposit and the Asset Mali accounts. Just like Faulu, you can make deposits on Choice through Mpesa.
The microfinance has loans grouped into three distinct areas of:
All these have minimum and maximum limits, payment periods, repayments plans and interest charged. Just like most microfinances, deposits on Choice can be made through Mpesa.
Choice Microfinance was started to link people in the diaspora with local investment opportunities. This was through providing small business loans with which locals can use to create small business enterprises.
Rafiki Microfinance has over 19 branches spread across 11 counties in Kenya. It uses the branches, internet banking, mobile banking, agency banking and ATM network to serve its customers. It also offers savings facilities, credit, money transfer service, trade finance forex and banc-assurance services. It’s one of the few MFIs that offer diaspora banking, savings, and loan services. This institution provides affordable asset finance, loans for chamas and SACCOs.
Century is a deposit taking microfinance institution providing financial services to micro, small, and medium businesses, providing full range services like savings account and credit facilities. It has over 26,000 clients.
The institution offers different loans based on their needs like overdraft loans, import duty loans, development loans, micro-leasing facilities loans and agribusiness loans.
This is a new MFI on the market. The institution was founded in March 2017 but had a vast customer base steadily increasing. Momentum Credit aims to provide the overwhelming demand for capital to SMEs and individuals.