Posts Tagged ‘kenya’
Posted on February 2, 2010 - by James
Kenya: Still reeling from the effects of post-election violence, drought
Microfinance institutions (MFIs) are emerging from one of their lowest business ebb in the last two years due to the 2008 post-election violence, a severe drought and dried fund taps from donors as a result of the global financial crisis.
According to the industry players, the last two years have been the toughest for their businesses.
“The last two years have been the toughest as we experienced a triple blow in the form of the post-election violence in 2008 a severe drought last year and dwindling funds from donors with most of our members the worse affected thereby resulting in the portfolio risk edging up”, said Lydiah Koros the chairperson of the Association of Microfinance Institutions (AMFI), the umbrella body for MFIs.\
Posted on November 25, 2009 - by boris
Kenya: Faulu Advisory Services acquires Trustmark Insurance…
Faulu Advisory Services, a fully owned subsidiary of micro-finance group Faulu Kenya, has acquired an insurance brokerage company as it seeks to diversify its offerings by getting a piece of the untapped business.
The micro finance firm has now taken full control of Trustmark Insurance Brokers at an undisclosed price, and a notice published in the latest Kenya Gazette indicates that Finance Minister Uhuru Kenyatta gave the deal the nod on November 11.
George Maina, the CEO of Faulu Advisory Services said the deal was in line with firm’s strategy to enter into new lines of business in a bid to grow its earnings and diversify the range of financial services it offers.
Source: http://allafrica.com/stories/200911230809.html
Posted on October 29, 2009 - by boris
Kenya: Carbon Manna Africa announces collaboration with the Kogelo Community Development Foundation…
Carbon Manna Unlimited in San Diego, California, a non-profit standards-setting organization popularizing the world’s first form of non-debt-based microfinance — the highly-scalable, cell-phone-based Carbon Micro-PROFIT-Sharing system — announced an exclusive agreement between its affiliate, Carbon Manna Africa Ltd. (Nairobi, Kenya), and the Kogelo Community Development Foundation (KCDF) in Kogelo, Kenya.
Kogelo is the childhood hometown of U.S. President Barack Obama’s late father. Carbon Manna Africa and KCDF will jointly utilize the sustainable Carbon Manna(SM) Micro-PROFIT-Sharing System to address various healthcare, nutrition and education challenges common to the Developing World.
The Carbon Manna(SM) System employs mobile phones, SMS (short message service) and unique stove identifiers that will allow millions of families in the Developing World to claim and monetize on a monthly basis the validated carbon micro-offsets they produce by utilizing more efficient cooking methods such as well-designed charcoal or wood stoves, instead of using an inefficient 3-stone fire burning excessive non-renewable biomass.
Source: http://finance.yahoo.com/news/Carbon-Manna-Africa-Ltd-iw-1267785200.html?x=0&.v=1
Posted on October 28, 2009 - by boris
Kenya to discuss how the global financial crisis has affected MFIs accross continents…
Kenya will host a three- day international symposium to discuss how the global financial crisis has affected microfinance institutions accross continents starting thursday this week.
The Meeting, which is organized by the MicroFinance Network (MFN) and hosted by Equity Bank, will bring together leading microfinance institutions from over 20 countries, who are members of the Network to share ideas, experiences, and innovative solutions to the challenges faced by the institutions in search of continuous growth and progress.
It is the first time a meeting by the MFN members will be taking place in Kenya.
The meeting, whose theme is “keeping Leadership in the Changing Environment”, will be officially opened by Finance Minister Uhuru Kenyatta at the Hilton Hotel, at 9.00 am.
Source: http://www.kbc.co.ke/story.asp?ID=60647
Posted on October 20, 2009 - by boris
Kenya: New SME rating tool to ease small firms’ access to credit…
Small and Micro Enterprises (SMEs) have lately become the “heart” of the Kenyan banking sector, surpassing the retail market which in the previous years had been a goldmine for most commercial banks.
During the peak season for the retail market, the rate of lending rose and threshold requirements for lending were lowered. Many of the retail customers took advantage of the lowered thresholds and dropped their loan applications at numerous banks to increase their chances of success.
For the few SMEs that have dared to put in their applications for loan facilities to strengthen their working capital from commercial banks, the underwriting system have became even more tighter.
Instead of the loan underwriting system of MFIs, which are only anchored on the three Cs of lending; character, capacity, and capital, they are subjected by banks to five Cs system of underwriting which includes the three , in addition to condition and collateral.
Source: http://www.businessdailyafrica.com/-/539444/674232/-/item/0/-/1p5422/-/index.html
Posted on October 14, 2009 - by boris
How will Microfinance reduce world poverty?…
Mary finished College in 2005, but getting a job proved really difficult. As is the case with so many graduates in the country who are unable to find unemployment, many of her colleagues in College had taken to selling their bodies and engaging in all sorts of immoral money-making schemes. But she had a different idea. She had a passion for African fashion, and as a talented designer, she designed some traditional Maasai shoes, and slippers which she had sold to European and American tourists visiting Mombasa. She wanted to delve into it fulltime as a business, but she needed capital to buy the required raw materials needed to kick start her business. She had approached a traditional bank for a loan of $200 to start off, but she was refused the loan.
When a neighbor advised her to approach a local microfinance institution, she did. She presented them with her idea and requested for the loan. They were only too willing to help. With the loan, Mary developed and grew her business. Today, her business is booming. She sells her products through tens of tourists scattered around Mombasa. Tourists and locals alike adore her footwear, and she has been able to create employment for seven more people.
Microfinance should be taken more seriously than ever before, and all who are serious about reducing world poverty should be actively involved. You´ll be surprised how far a few dollars can go to change the future of the world, one person at a time.
Source: http://www.americanchronicle.com/articles/view/123757
Posted on September 30, 2009 - by boris
Jamii Bora GreenMicrofinance to build sustainable infrastructure such as solar and wind power…
Jamii Bora Trust in Kenya and GreenMicrofinance™ Philadelphia recently unveiled a commercial microfinance venture at Morgan Stanley focusing on an environmental investment project that could become a model.
GreenMicrofinance has established “Jamii Bora GreenMicrofinance Ltd.” The Pennsylvania-based company will channel investment money into the microfinance organization, Jamii Bora in Kenya.
It will provide environmental expertise and source funds to build sustainable infrastructure, such as solar and wind power, wetlands development, rain water harvesting and support for the growth of “green” microbusinesses, such as biowaste plants, agricultural initiatives, and clean water and sanitation projects.
“Separately addressing the economic and environmental effects of poverty does not work,” said Elizabeth Israel, GreenMicrofinance founder and chief executive officer. “Most don’t deliver an integrated approach. Jamii Bora GreenMicrofinance will focus on bringing a revolutionary new business model for sustainable development to the world.”
Source: http://eponline.com/articles/2009/09/28/venture-to-support-solar-and-wind-power-in-nairobi.aspx
Posted on September 17, 2009 - by boris
MicroEnsure opens a new office in Kenya…
MicroEnsure, the world’s first insurance company that serves the needs of the poor, is opening a new office in Kenya after its ongoing success in Ghana, Tanzania, Uganda, India and the Philippines, according to an article in africanewsbreak.com.
The company’s goal is to reach sustainability for insurance companies to grow local economies in partnership with microfinance organizations, rural banks, as well as humanitarian organizations that are providing non-financial services.
According to the company, traditional insurance products have tended to fail in these markets because they didn’t meet the needs of the poor. Despite this, the company said, demand for microinsurance products is growing.
Source: http://www.tonic.com/article/microensure-opens-kenya-office/
Posted on September 7, 2009 - by boris
The government of Kenya plans to use Saccos in disbursing the Women Enterprise Fund…
The government plans to use Saccos in disbursing the Women Enterprise Fund in a bid to reach more women especially in the rural areas.
Women currently access the loans from financial intermediaries mostly based in urban areas, locking out those in far-flung areas.
“Most of the financial institutions like the microfinance institutions and banks are concentrated in towns and cities and women in rural areas find it difficult to access the loans, said Gender minister, Ms Esther Murungi.
“In the next disbursements in June 2010, we intend to use 34 financial intermediaries, the majority of which will be Saccos since they have a wider grassroots reach.”
Source:http://www.businessdailyafrica.com/-/539552/653944/-/583j0s/-/
Posted on August 13, 2009 - by boris
Kenya’s Jamii Bora Trust and an American nonprofit group build homes with microfinancing…
Kenya’s Jamii Bora Trust has teamed up with an American nonprofit group to create Africa’s first ecologically friendly town built with microfinancing. Some 2,500 families are slated to live in Kaputei, near Kenya’s capital of Nairobi. The families, most of who are from slum areas of Nairobi, will be able to purchase these homes with micro loans.
Members purchasing Kaputei homes receive loans with up to a 10 percent interest rate and up to 15 years’ repayment time. The monthly mortgage is $36, comparable to rents in the slum.
Source: http://www.voanews.com/english/2009-08-12-voa34.cfm
Posted on June 26, 2009 - by Gavin
Home Proposals pave way for banks to reach rural poor…
Business Daily
Finance minister Uhuru Kenyatta on Thursday proposed amendments
to the Banking Act to legalize branchless banking and allow the
Kenya Post office and Savings Bank to trade in the foreign
exchange market.
Should the proposals be enacted, The Post Office Bank long
saddled by laws barring it from carrying out conventional banking
business will now be able to receive deposits on behalf of
commercial banks while trading in the forex market.
In the landmark proposal, minister for finance Uhuru Kenyatta’s
move to allow commercial banks to use non-bank agents such as the
post office is expected to unlock the reach of banking services
across the country.
Posted on June 26, 2009 - by Gavin
NEWS WIRE: Kenya to License Nine Deposit-Taking Micro Lenders by December…
Microcapital
Faulu Kenya Ltd. was granted a license by the central bank to
accept deposits, the first microfinance institution in Kenya to
receive such a permit.
As many as nine micro lenders are expected to receive similar
licenses by the end of this year, Central Bank of Kenya Governor
Njuguna Ndung’u told reporters today in the capital, Nairobi.
Previously, the company wasn’t allowed to take money from the
public and was only able to issue loans.
Faulu was among nine companies that have submitted formal
applications to become deposit-taking institutions, Ndung’u said.
The license was granted in terms of the Microfinance Act that
came into effect in May 2008 and is expected to promote a culture
of saving in Kenya, Ndung’u said.
Posted on June 23, 2009 - by Gavin
Govt to increase access to financial services…
Kenya Broadcasting
President Mwai Kibaki Monday underscored his
governments’ commitment to formulating and implementing policies
that will lead to the development of a stable, efficient, safe and
accessible financial sector.
“news”>The President said the government is working
towards increasing access to financial services and products to all
Kenyans, particularly the poor, low income households and micro and
small scale enterprises.
“news”>President Kibaki who was speaking Monday
during the Family Bank’s Silver Jubilee celebrations at Kenyatta
International Conference Centre noted that a vibrant financial
sector is vital to a country’s social and economic development
since it provides the financial resources needed for
growth. “news”>”In Kenya this is one
sector that has helped in the attainment of our development
aspirations, and will continue to play a pivotal role in the
realization of VISION 2030,” President Kibaki said.
In this regard, President Kibaki directed
the Central Bank of Kenya to enhance its efforts to provide
information on the cost of banking services to
Kenyans. The President said
the information should be delivered in formats that can be easily
understood and used for comparison of the pricing of different
banking products and services to enable Kenyans shop for
competitive banking services.
“news”>Besides improving access to financial
services, President Kibaki said the Government will implement
measures aimed at bringing down the cost of credit which has
remained beyond the reach of many Kenyans.
These measures will include the
implementation of credit information sharing, the President
said. The Head of State observed that following the
implementation of regulations to facilitate credit information
sharing in February this year, the Central Bank of Kenya will
license Credit Reference Bureaus.
“news”>”The Bureaus will gather credit information
from banks that will facilitate lending decisions. This information
will also be extremely helpful for borrowers who may not have
physical collateral. In
cases such as this, an individual’s credit history will serve as
the collateral for loans,” President Kibaki said.
“news”>The President also urged banks to exploit
technology to reach more Kenyans in a cost effective way, noting
that the Financial Access National Survey for 2009 indicates that
the banking sector still serves only 22 per cent of the bankable
population.
The Head of State cited mobile phone technology as an example of
channels that banks could use to reach more Kenyans, saying the
success of mobile money transfer services underscores the
potential of mobile phone financial services.
“Kenyans continue to show a strong affinity to mobile phones that
can be tapped to provide financial services. I, therefore,
encourage banks to scale up their use of mobile phone banking as
a delivery channel to offer cost effective banking services,”
President Kibaki said.
He commended Family Bank for adopting a banking business model
that focuses on millions of the un-banked Kenyans at the lower
end of the society, saying despite the significant growth in the
number of commercial banks witnessed over the years, a majority
of Kenyans are still un-banked.
President Kibaki noted that the Family Bank is one of the only
two building societies that successfully became banks, but
dealing mainly in microfinance.
The President said over the last decade microfinance has
developed significantly and has now assumed a central role as one
of the key drivers of the country’s economic growth and efforts
to fight poverty.
He saidin providing small business enterprises with appropriate
financial products and services, such banking institutions have
been contributing in the delivery of the social benefits often
associated with such businesses.
Said the President: “Experience the world over has taught us that
the micro-enterprises are key to sustainable economic development
and in particular to the elimination of poverty.”
The Head of State pointed out that micro-enterprises provide a
path to economic self-reliance for owners and entrepreneurs while
benefiting their local communities.
“Indeed, as a channel of intermediation, the financial sector has
continued to play an immensely crucial role in the development of
our economy,” the President said.
The President expressed satisfaction that a Financial Access
National Survey for 2009 indicates that various policy actions
formulated by the Government to foster access to financial
services by Kenyans have begun to bear fruit.
President Kibaki, however, said much more needs to be done in
ensuring that more Kenyans have access to the financial services.
In this regard, the President said the recent budget proposals by
the Minister for Finance on branchless banking and
principal-agent models of financial service delivery will go a
long way in facilitating strategic alliances between banks and
non-bank financial institutions such as SACCOs and Microfinance
Institutions.
He said such alliances will serve to ensure that more Kenyans can
access safe, efficient and affordable financial services.
The President also expressed satisfaction that the first
Nationwide Deposit Taking Microfinance Institution was officially
launched by the Central Bank recently after the Microfinance Act
of 2008, which provides for both National and Community Deposit
Taking Microfinance Institutions, became operational.
“The Government and, indeed, the public expect these institutions
to serve especially the rural and peri-urban areas that have
previously been inadequately served by the banking sector.
More particularly, they have a unique capacity to direct
financing to small-scale enterprises that lie at the heart of
Kenya ’s economic development,” said the President.
Saying the deposit base in Kenya ’s banking sector has increased
to 940 billion shillings, 69 per cent of which has been extended
as loans, the President said the commendable increase creates a
strong base for banks to lend to enterprises.
“This phenomenal growth in the banking sectors’ deposit base has
been backed by an exponential growth in the number of bank
accounts.
The number of bank accounts has increased from 2.6 million at the
end of 2005 to 6.4 million at the end of last year,” President
Kibaki said.
Speaking during the same occasion, Deputy Prime Minister and
Minister for Finance Uhuru Kenyatta said that with the improved
environment for doing business in the country, it is possible for
the country’s economic growth to attain the targeted 10 per cent
mark but cautioned that political climate must be conducive too.
Central of Bank of Kenya Governor Prof. Njuguna Ndungu commended
local banks for expanding their services to the East African
region, noting that the East African region’s Central Banks have
signed a memorandum of understanding for sharing information and
supervisory cooperation.
Prof Njuguna also urged local banks to reduce barriers of
acquiring banking services and account maintenance costs to reach
more of the unbanked Kenyans.
Family Bank Chairman Titus Muya announced that Family Bank had
abolished all ledger fees for savings accounts to minimize the
cost of maintaining an account with the bank for ordinary
Kenyans.
Mr. Muya thanked President Kibaki for his role in building the
country’s robust economic development rate within his first term
of leadership and termed the President as one the main
architects’ of the country’s economic foundation since
independence.
The function was attended by Internal Security Minister Prof.
George Saitoti, Head of Public Service and Secretary to the
Cabinet Amb. Francis Muthaura and other senior public and private
sector officials.
Source:
“http://www.kbc.co.ke/story.asp?ID=58153″>http://www.kbc.co.ke/story.asp?ID=58153
Posted on June 1, 2009 - by Gavin
Kenyans bank on microfinance…
Al Jazeera.net
Through a series of special reports, Al Jazeera explores how the global recession is affecting the use of microfinance as a tool to aid the developing world.
Amidst the sprawl of shacks in one of Africa’s poorest slum districts the word “microfinance” is starting to give hope to jobless people whose lives are mired with poverty.
Strutting through the muddy track that serves as main street in this settlement named after the South African township of Soweto, a woman in clean, well-pressed white clothes is in great demand.
Her name is Joyce Wairimu. Seven years ago she was begging for food to feed her family. Now she is an entrepreneur, a businesswoman on a mission.
Joyce borrowed money using microfinance. She’s spreading the word – and investing her profits.
Joyce takes me into Babylon restaurant. It’s bustling with customers ordering cheap wholesome food.
This is one of a string of enterprises Joyce has built using small loans: a second restaurant which she’s having rebuilt after a fire burnt it down, a small cinema, a soft drinks distribution business, a mobile catering service which also delivers school meals. She employs 62 people.
It was only seven years ago that she was destitute, having lost all of her possessions during tribal clashes in upcountry Molo. (more…)
Posted on May 29, 2009 - by Gavin
Equity Bank expects 40% profit growth this year…
The New Vision
One of Kenya’s most successful banks, Equity, expects pre-tax profit to rise 30%-40% this year, slower than last year’s 111% growth due to investments in expansion, its chief executive said.
James Mwangi, whose bank specialises in rural customers and holds more than half of the accounts in east Africa’s largest economy, told Reuters that because of the tough global conditions and drought at home, he did not expect the market to be disappointed by the forecast.
“It is not that the bank is not generating … The top line is growing beyond 100%, but we decided to create future business whereby we have focused on investing and creating a new earning platform.”
Mwangi said in the last year, Equity had expanded operations in Kenya with another 62 branches, an investment bank, a shares custodial service at the bourse and an insurance agency.
“This is a period of investing.”
Mwangi said the bank’s shareholders had resolved to buy into National Bank of Kenya, a rival that is being put up for sale by the government in an 8 billion shilling privatisation programme. (more…)
Posted on May 22, 2009 - by Gavin
Kenya’s Equity Bank says Q1 profit rises 29 pct…
Reuters
NAIROBI, (Reuters) – Kenya’s Equity Bank (EQTY.NR) posted a 29 percent jump in pretax profit for the first quarter of this year to 1.16 billion shillings ($14.94 million), up from 0.9 billion a year earlier, its CEO said on Thursday.
Operating expenses leapt 69 percent to 2.2 billion shillings from 1.3 billion shillings in the first three months of 2008 as the bank opened new branches and started new businesses including an investment bank.
“It is a time of planting and weeding before we can harvest,” the chief executive told investors.
“While these investments pushed the cost-to-income ratio to 66 percent, it puts the bank in position to generate superior performance in the future.”
He said half of Equity’s 106 branch network in Kenya had not yet broken even, costing it 200 million shillings a month.
All but 10 of the branches, however, would break even by the fourth quarter of this year, Mwangi said. (more…)
Posted on May 11, 2009 - by Gavin
MICROCAPITAL STORY: K-Rep Bank of Kenya Receives $2.2m Microfinance Investment from the African Development Bank (AfDB)…
Microcapital
K-Rep Bank, a commercial bank that directly targets low income clients in Kenya, received a Kshs 174.8 million (USD 2.2 million) investment from the African Development Bank (AfDB) during May 2009. This financial support will also include technical assistance related to capacity building. K-Rep Bank provides various banking services and specializes in loans to low income, small and micro entrepreneurs. K-rep plans to create 10,000 new jobs by 2011 of which 55 percent would involve women entrepreneurs.
As at the end of 2007 K-Rep had over 153,000 active borrowers of which 64 percent were women. The average loan balance was USD 529. The gross Loan Portfolio was USD 81.5 million with Total Assets of USD 110.5 million, as reported to the MIX Market, the microfinance information clearing house. K-Rep had a Return on Assets of 2.2 percent and a Debt to Equity Ratio of 592 percent.
In November 2008 a MicroCapital story reported that K-Rep announced a USD 2.6 million loss for the nine months to September 2008 and received an injection of capital of USD 12.7 million from shareholders. By the end of 2008 the loss for the year was USD 4.4 million and MicroCapital reported that a new Chief Operations Advisor, Gerard Monteiro, had been appointed. Gerard Monteiro, a 33-year veteran of the banking and microfinance sector in Africa and the Middle East, is looking to cut costs and examine the current structure of the organization. (more…)
Posted on May 6, 2009 - by Gavin
Equity named best bank of the year…
Kenya Broadcasting Corporation
For the second year running, Equity has been named the best bank in Kenya.
Equity was named the bank of the year at the 2009 Banking Awards which recognise the best financial institutions in Kenya.
The second and third positions went to Barclays Bank and Kenya Commercial Banks respectively.
The annual awards were launched in 2006 by Think Business Limited.
Renaissance Capital Kenya, the local subsidiary of the Russian-owned Investment Bank was the title sponsor in 2006 and 2007 editions.
The aim of the awards is to encourage prudence and stability in the banking sector by recognising, awarding and celebrating exemplary performers and successes of the sector, therefore encouraging competition.
Posted on May 6, 2009 - by Gavin
Kenya’s Central Bank to push for new banking rules…
Daily Nation
The Central Bank of Kenya is pushing for policy guidelines that will enhance the regulatory framework of branchless banking.
This the bank says has been formed out of the increasing Information Communication and Technology based banking services that continues to be made available for customers.
According to Mr Cassian Nyanjua, an assistant director banking supervision at the bank, new regulations are also supposed to enhance the stability and safety.
“We will continue to develop appropriate policy, legal regulatory and supervisory regimes to govern the conduct of branchless banking, which involves use of ICT and ICT enabled services,” said Mr Nyanjwa
Internet banking and Mobile money transfer services are fast taking root in Kenya as a result of their efficiency and convenient usage.
However, their applications are still clouded by regulatory mishaps that might threaten their existence.
Posted on April 21, 2009 - by Gavin
MICROCAPITAL STORY: Kenya’s K-Rep Bank Brings in New Manager as a Response to $4.4m Loss in 2008…
Microcapital
K-Rep Bank, a Kenyan commercial bank that targets the microfinance sector, appointed Gerard Monteiro as the new Chief Operations Advisor after reporting a Sh 349 million (USD 4.4 million) loss for 2008. It is hoped that Mr. Monteiro, a 33-year veteran of the banking and microfinance sectors, will help to reverse the five-year low-profitability trend K-Rep Bank has faced.
K-Rep Bank was formed in 1997 as a subsidiary of K-Rep Group Limited, a Kenyan development agency that provided funds to NGOs for microfinance. In 2000, K-Rep Bank became the first commercial bank in Kenya to directly target low-income clients. By the end of 2007, the Bank had almost 154,000 active borrowers, and a gross loan portfolio of USD 81 million. More information about K-Rep Bank’s background and structure can be found in this MicroCapital story.
While K-Rep had a Sh 131 million (USD 1.6 million) pre-tax profit in 2007, the Bank registered Sh 349 million (USD 4.4 million) in pre-tax losses for 2008. In fact, its non-performing loan portfolio had more than doubled to Sh 1 billion (USD 12.6 million), compared to Sh 431 million (USD 5.4 million) the year before. These losses were initially attributed to post-election violence in Kenya and the global economic slowdown, as well as large investments in the Bank’s information and communication technology (ICT) infrastructure, however several additional factors have since been identified. (more…)
The MiFi Report
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