Top Microfinance Institutions in Kenya

Microfinance institutions in Kenya play a vital role in providing savings and credit facilities to Kenyans without access to traditional banking. Many people rely on local chamas and merry-go-rounds, with dormant bank accounts common among those who have them. This limits their ability to secure loans for personal or developmental projects.

Microfinance bridges this gap by offering small loans to low-income earners, fostering employment, and providing training in loan use, entrepreneurship, and managerial skills. Rooted in group lending, it also promotes financial inclusivity and supports sound financial habits through cooperative savings and credit associations.

Before Kenya’s formal banking system, informal microfinance structures like SACCOs and money lenders thrived. Today, some microfinance institutions operate independently, while others are extensions of large investment banks. It's essential to understand the differences between SACCOs and microfinance institutions to choose the best financial provider for your needs.

List of the Top Microfinance Institutions in Kenya

Below is a list of the top microfinance institutions operating within Kenya. They are not ranked but the list outlines the most prominent ones and those highly favored by many people in the country.

1. Kenya Women Finance Trust (KWFT)

KWFT started as a financial institution committed exclusively to address the financial and non-financial needs of women in Kenya. It has grown to be the most popular in Kenya.

The institution was licensed to operate as a deposit taking microfinance by the Central Bank of Kenya (CBK) in 2010. In the year 2014, it changed the name to Kenya Women Microfinance Bank Limited.

With over 800,000 customers and 245 branches throughout the country, KWFT offers savings and loan services to all women and girls. All these are managed by a dedicated workforce of over 2,800 staff members.

KWFT is a fully fledged Microfinance Bank offering banking services that include both savings and credit products that cater for the needs of Micro, Small and Medium sized entrepreneurs. KWFT’s products and services are open to Organized Groups, Individuals, and Corporates.
As of December 2017, KWFT had a loan book Kshs. 19.4 billion, assets valued at Kshs. 28.9 billion and deposits of Kshs. 16.4 billion.

The Institution has also ensured it’s in line with modern trends in the banking industry; this includes Mobile Banking, ATMS, Agency Banking, Payment Systems (EFT & RTGS) and Money Transfer Services (MPesa, Airtel Money, Western Union, MoneyGram and PesaLink).

Reach them via:

• Call: 0703 067 700

• Email at info@kwftdtm.com

2. Faulu Microfinance

Faulu Microfinance Bank was founded by Food for the Hungry International (FHI), a Christian relief organization, Loan scheme program that targeted the economically active poor in Mathare. From its humble roots as a loan scheme in 1991, Faulu is currently one of the top Micro Finance Banks in Kenya and has successfully developed a platform aimed at banking the previously unbanked though a variety of savings, credit, micro insurance and mobile banking solutions.

It's one of the top microfinance institutions in the country. The Bank offers customers a full array of financial services that include Banking, Investment, Savings and Insurance with special reference to Community, Retail, MSME, Institutional Banking segments and Bancassurance.

Faulu Microfinance Bank has demonstrated a track record of enviable growth in its assets and loan book. The bank has grown tremendously over the last 25 years from a single MFI office in 1991 to over 67 service outlets which include 43 banking and 24 Marketing Offices in the 40 out of 47 Counties in Kenya by end of 2017.

Loans from Faulu are easily accessed. The loans are processed within 24hours, and the interest rates are amicable. You can perform transactions on Faulu at any Faulu branch, Faulu agent, or ATM within the country. Faulu headquarters is located along Ngong Lane, off Ngong Road in Nairobi.

3. Choice Microfinance Bank Limited

The Choice Microfinance headquarters is located in Siron Place, Magadi Road, Ongata Rongai, Kajiado county. The institution offers services such as loans and savings.

The microfinance has loans grouped into three distinct areas of:

• Personal
• Group
• Business

All these have minimum and maximum limits, payment periods, repayments plans and interest charged. Just like most microfinances, deposits on Choice can be made through Mpesa.

Choice Microfinance was started to link people in the diaspora with local investment opportunities. This was through providing small business loans with which locals can use to create small business enterprises.

Reach them via:

Call: +254731225879

Email at info@choice-bank.com

4. Uwezo Microfinance Bank

Uwezo Microfinance started in 2008 and in 2015 received a nationwide license as a deposit-taking microfinance institution to bridge the gap left between commercial banks and the general public. It provides both loans and savings services. The institution offers short-term loans at flexible interest rates. The microfinance has over 30,00 active customers, both via the branch network and through the mobile lending platform whose aim is to ensure financial inclusivity.

The institution offers loans on car logbooks, farming, emergency loans and facility for savings and deposits.

Reach them via:

Call: 0775271393 & 0740397983

Email at info@uwezomicrofinance.com

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5. Musoni Microfinance Institution

Musoni started operations in 2010 and leverages innovative technology to provide financial services to micro-entrepreneurs and small-holder farmers in Kenya. Its services are through its core financial products: group lending, individual loans, and agricultural loans. The letter “M” in the name Musoni stands for Mobile since it is centered around Mobile banking. Currently, it stands as the most mobile-based, hence it’s a paper-less microfinance institution.

With Musoni, there are no hidden charges when registering. On loan applications, the loans are processed within 72 hours and deposited into your account.

Reach them via:

Call: 0709761111

Email at customerservice@musoni.co.ke

6. Rafiki Microfinance Bank

Rafiki Microfinance has over 19 branches spread across 11 counties in Kenya. It uses the branches, internet banking, mobile banking, agency banking and ATM network to serve its customers. It also offers savings facilities, credit, money transfer service, trade finance forex and banc-assurance services. It’s one of the few MFIs that offer diaspora banking, savings, and loan services. This institution provides affordable asset finance, loans for chamas and SACCOs.

Its loaning facility caters for agri-business, housing, asset finance, chama and SACCO loans.

Reach them via:

Call: 0711073000

Email: info@rafiki.co.ke

Conditions for Microfinance Institutions in Kenya

It is advisable for all credit facilities extended by the above institutions to be properly utilized as one pays interest on them and any defaulters, action is taken against them according to the law and agreements made between them and the microfinance institution.

Hence, ensure you utilize your loan monies for the intended purpose and also ensure, you utilize their savings facilities as a handsome interest is paid annually to account holders.

Criteria used for one to be able to access either the credit or savings facilities in any microfinance institution range but below are the most common:

1. Eligibility

Different Institutions use different criteria to determine those eligible for credit facilities or entry. In most cases, eligibility is based on gender and age. Here, for one to be accepted, you’ve got to meet all the laid down requirements. Most point taken in account include gender (some prefer women), age (youth), nature of business (like those that only support agribusiness or locally produced exportable products) and much more.

Citizenship is mandatory and have attained the age of 18 years and above. Your ability to repay the loan and remain a customer of the institution will also be assessed.

2. Interest rates

In most cases, interest rates on microfinance loans are based on a flat rate. However, some loan interests are calculated on a decreasing balance. A majority of the Institutions insist on a monthly repayment system.

The Interest on the loan varies between 20% and 30% for loans not exceeding Kshs 1 million. Be careful not to fall to those that are exorbitant, demanding a percentage of the applied amount as interest before disbursement and repayment starts.

3. Credit score

Most of them do not have a system for checking a credit score. But it makes it easier if you’re already an account holder, with some substantial deposits that will dictate the multiple value of your total deposits the credit facilities they can extend to you. You also need to proof how you loan is going to work for you and show a repayment plan with a guarantor to back you up in case you default.

Conclusion

The decline of barriers, promotion of financial inclusion and attention to the particular needs of rural areas and their residents are all samples of how microfinance institutions in Kenya still upholds their services today.

Let us know which Microfinance Institutions you are in on the comment section and what you love about it!