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"id": 236003,
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"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
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"id": 174,
"legal_name": "Amos Muhinga Kimunya",
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"content": " Mr. Temporary Deputy Speaker, Sir, let me begin by thanking the hon. Members for their support. I think, as I sat here the whole afternoon, I have only heard of \"We all support this initiative\" and \"We all believe it has been long overdue\". Most importantly, we have demonstrated faith in our entrepreneurs and the microfinance sector. If we support it, it will serve this country in terms of growth of its economy. I would like to just assure hon. Members of this House that the concerns I have heard this afternoon are the same concerns we have been hearing in the course of formulation of this Bill through the multiple stakeholder analysis that has been going on. All these concerns have actually been addressed. What we have here is a negotiated document that has come from a general consensus that has been formed by all the players within the industry. I must thank the hon. Members because whatever has been coming out is in resonance with what came from the stakeholders themselves. I also want to just mention here that this is only the beginning. We have set up the legal framework. We know that we have been operating in a vacuum. This is a first in many ways. In many places we do not have these laws. As we start the implementation of the law, I am sure that the lessons learned from the implementation will then be included in further refinement of the law. I am believe that this Bill will be an Act very soon. We need to start facilitating our people so that they can start operating legitimately. Mr. Temporary Deputy Speaker, Sir, just like I said before, this is just the beginning. A lot more is yet to be done. However, let us start promoting the growth of microfinance institutions. Let us not delay because as we analyze that too much, we could as well paralyse this sector. I hope that with the passage of this Bill, we shall see our microfinance institutions grow and blossom. We hope to see them start branches from Kacheliba to Kiunga; Namanga to Mandera; or Nairobi to Mombasa. We need them in all the places where there are microfinance operations taking place. People are interested in us putting in place a safe and legal mechanism through which they can access finance and save their money. They need assurance that there is somebody who is protecting them and that they will not be invaded by shylocks who take their hard-earned savings and disappear with them. I would also like to mention something about the share capital. Setting the share capital at Kshs60 million is, again, something that we decided after going through a series of negotiations. It was agreed that we start with Kshs60 million, especially in urban areas, but allow for a lower threshold of Kshs20 million for people who want to start those operations or formalise them in the countryside. This does not, however, in any way stop operation of branches across the country. We agreed that we should have a few microfinance institutions to learn lessons from and to facilitate this provision mechanism. After that, we could then open more of these institutions. In any case, there is no reason why they should not spread their branches across the whole country. Mr. Temporary Deputy Speaker, Sir, within the tightness of law, it might appear like we are over-regulating. However, everyone seems to agree that we need to have stricter laws at this point so that we can all start from a clear footing and as we move along, we could ease out on the ones that are felt to be top heavy. We realise that we need to use the Central Bank of Kenya's (CBK's) provision mechanism. We need to consider benchmarking our microfinance institutions against the international standards because we are starting a first one for Kenya and for this region as a whole. Mr. Temporary Deputy Speaker, Sir, even as we look at the growth of the Grameen Bank and others, let us also look in retrospect at where K-Rep started. It started as a microfinance institution, but it is now a bank. The same applies to Equity Bank which is now the fastest growing bank in our region. November 8, 2006 PARLIAMENTARY DEBATES 3541 Again, I attribute this to the support that has been rendered by the legal framework to safeguard people and instil confidence in them that if they put money in these institutions it will not disappear. Mr. Temporary Deputy Speaker, Sir, once we streamline the legal framework, we shall be able to experience growth. We might as well consider having mini microfinance institutions to cater for the small-scale entrepreneurs. We need to know how we can bring them within the law. Let us consider what we are doing now as the first step from the main banks to the microfinance institutions and hope that very soon we will need another set of laws for microfinance institutions. Mr. Temporary Deputy Speaker, Sir, I hope that I have addressed some of the issues that were raised by hon. Members. I can only promise that we have taken all those issues seriously. They actually resonate with what the stakeholders brought forward in their analyses. We also hope that we shall finalise this process and give Kenyans all the legal frameworks for different players at different levels. Mr. Temporary Deputy Speaker, Sir, with those remarks, I beg to move."
}