KWFT & Faulu Banks Control 82% of Microfinance market share in Kenya

There were 13 regulated microfinance banks (MFBs) as at 31st December 2016 with assets amounting to Sh 72.5 billion. There were 3 large microfinance banks with an aggregate market share of 90.0 percent, 3 medium microfinance banks with a market share of 6.6 percent and 7 small microfinance banks with a market share of 3.4 percent.

The Kenya Women Finance Trust had a market share of 42.90%, followed by Faulu Micro-finance bank at 39.20% while Rafiki Microfinance was third with a market share of 7.90%.

The 13 microfinance banks had a total staff complement of 4,423 in 2016 compared to 4,500 staff from 12 microfinance banks in 2015.

The microfinance banks’ profit before tax decreased by 169 percent from KShs. 549 million for the period ended December 2015 to a loss of KShs. 377 million for the period ended December 2016. The decline in profitability in the sector was largely attributed to reduction of financial income by 27 percent or KShs. 3.9 billion in 2016.

The branch network grew from 109 branches in 2015 to 112 branches in 2016 while the marketing offices grew from 88 to 105 and third party agents from 1,154 to 2,060 agents as at the end of December 2016. Out of the deposit base of KShs. 40.2 billion, 33 percent comprised of cash collateral held by the microfinance banks as security for loans granted. Similarly, the size of net loan portfolio increased by 3 percent from KShs. 45.6 billion in 2015 to KShs. 46.9 billion in 2016.

-Central Bank of Kenya