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{
    "id": 463343,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/463343/?format=api",
    "text_counter": 225,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "Section 2 of the Kenya Deposit Insurance Act, 2012 is amended by deleting the definition of the term “institution” and substituting therefor the following new definition— “institution” means a bank, financial institution or mortgage finance company as defined in the Banking Act, or a microfinance bank as defined in the Microfinance Act, 2006, or any other deposit taking entity licensed by the Central Bank”. Hon. Temporary Deputy Chairperson, I did explain earlier that we agreed in the Committee that microfinance institutions should be called “microfinance banks.” The reasoning behind is that these are very important institutions within our communities and they are institutions that exist where normal banks do not attempt to go. These are institutions that took over where the big banks left our people a long time ago and they have been trying to mobilize deposits for the purpose of lending to other customers. The question has been that people are used to the word “bank” and we agreed as a Committee that, if they have been given the power to collect deposits; the highest risk whenever there is a grant is for somebody to hold your deposits. So, we agree that let them be given the power to use the word “bank.” The effect of that is the amendment under the Banking Act. That paragraph is meant to allow the microfinance institutions use the word “bank”, but at the same time, exempt them from the normal bank issues, just the way we exempt investment banks. The Act exempts Postbank. It still uses the name “bank” but it is not doing the normal bank operations. That is the effect, hon. Temporary Deputy Chairman."
}