The microfinance banks sector loan book surged to 811.3bn/- last year as compared to 620.6bn/- recorded in 2021 according to the Financial Sector Annual Supervision Report 2022 released by the Central Bank.
According to the report, the performance of microfinance business improved last year supported by increase in number of microfinance service providers (MSPs), total loans disbursed, number of beneficiaries and increased outreach to unbanked population.
“The number of licensed Tier 2 MSPs increased to 1,095 from 692 in 2021 while the number of Tier 3 MSPs (SACCOS) increased to 759 in 2022 from 580 recorded in 2021.
Tier 4 MSPs (Community Microfinance Groups) also increased to 34,127 from 24,123 recorded in 2021, the report shows.
Last year, the Central Bank continued to take measures to improve financial customers’ protection with measures including instructing all licensed Microfinance services providers to establish customer complaints handling mechanisms, conducting public awareness programs and capacity building to MSPs, enforcing the use of reducing balance method for interest rate computation and instructing MSPs to refund borrowers the over deducted loan amounts.
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