Bankers push back on Sh250m capital rule for microfinance firms
Key points
- KBA wants Parliament to rethink a Sh250m capital floor for microfinance institutions.
- Bankers warn of consolidation, exits and reduced financial access if rules bite too hard.
- Proposed competition fines are also in the industry’s crosshairs.
Kenya’s banking lobby is fighting a capital hike that could reshape the microfinance tier. Eastleigh Voice reports the Kenya Bankers Association (KBA) wants Parliament to rethink a Sh250 million capital requirement for microfinance firms, warning the rule — alongside proposed competition fines — could trigger market exits and reduce access to financial services.
Higher capital can protect depositors and stabilise weak lenders. It can also wipe out smaller MFIs that serve counties and informal traders banks ignore. KBA’s pitch is that the dose may kill the patient.
Inclusion vs stability
Regulators chase fewer, stronger institutions; development advocates chase last-mile credit. The Sh250m debate is that collision in one number. If smaller players merge or close, borrowers may face fewer products and higher prices — or migrate to unregulated lenders.
Parliament’s job is to weigh CBK stability goals against inclusion data, not lobby slogans alone.
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Public business reporting synthesis; draft law details can change in committee.