Maisha Microfinance Bank launched as new lender moves to target SMEs

A former influential Moi-era businessman Jared Kangwana has teamed up with his business counterparts to open Maisha Microfinance Bank (Maisha MFB) targeting only small and medium-sized borrowers.

The move comes just after economists have warned that a new law to cap lending rates at 14 per cent could lock out a majority of small borrowers.

Speaking at the bank’s launch ceremony in Nairobi last week, Maisha MFB CEO Ireneus Gichana said the micro-lender would seek to link the existing financial inclusion gap being witnessed in both the sector and the country at large.

He confirmed that the newly launched institution will advance micro loans as low as Sh10, 000 and up to Sh350, 000 with a turnaround processing time of two days.

The Central Bank of Kenya licensed the lending institution, which surpassed all the necessary requirements, having an initial capital of Sh90 million. The CBK sets Sh60 million as the base starting capital for a new lending institutions.

Gichana added that the bank will roll out micro insurance products besides providing low-cost banking products.

The first outlet of the lender will be located at Chester House in Nairobi’s Central Business District, bringing the total number of licensed banks to 13.

Data indicates that only 8 per cent of Kenyans have been excluded from financial access since 2014, a move the CEO says is motivating them to bridge the gap.

However, the new bank did not confirm the rates at which the loans would be hinged but confirmed that they would be friendlier as compared to the current lending rates across the sector.

The lender is set to partner with small and medium enterprises, a move that would help it lure over 50,000 new clients before the end of the year.

“Since our launch we have over 400 customers with a plan to hit the 50,000 mark by end year, during our research, one thing came clear, Small and Medium Enterprises lack enough capital, they need short term loans to finance their businesses, we are planning to partner with them to boost their businesses,” the CEO added.

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