New micro-finance laws due

The Government is preparing benchmarks to guide the operation of credit giving micro-financial institutions, a Central Bank of Kenya official has said.
Banks supervisory director, Rose Ndeto, said the ministry of Finance will come up with the guidelines that will be used by non-deposit taking institutions in their operations.
Speaking after the opening of the Kenya micro-finance conference at Strathmore University on Friday, Ndeto said this was among the measures that were being undertaken to facilitate smooth operation of the MFI’s.
She said the Micro-finance Act, 2006 was awaiting gazettement by the Attorney General’s office and could take effect early next year. The Act is meant to set standards and protect the depositors funds.
However some of the participants at the conference wanted the gazettement fast- tracked to cushion it from political interference.
Ndeto said CBK would also launch a consumer awareness on the licenced MFI’s to prevent the public from being fleeced by the pyramid schemes.
She said the Kenya Bankers Association were among those who will take part in the education.
Some participants recommended that entrepreneurship be made a mandatory subject for all the undergraduate students to sharpen their skills.
“This will make the youth and women fund more effective. It will also help manage credit from other financial institutions” a participant said.
K-Rep Bank managing director, Kimanthi Mutua said the banks were faced by shortage of middle level managers following the rapid expansion in the last three years.
The bank gave a Sh200,000 cheque to the university to start a scholarship scheme for the students take studies in micro-finance. “This is seed money to start the scholarship and we appeal to more institutions to contribute to build the fund” Strathmore University Vice-Chancellor Professor John Odhiambo said.

SOURCE: DAILY NATION