The donation will be used as seed money to enhance micro finance education at the University. Already, the University offers a diploma in micro-finance. Mr Mutua lauded the University's efforts to train manpower for micro-finance institutions.

"MFIs have been doubling up in their core business and in training manpower. There is need to support tertiary institutions to prepare quality manpower for MFIs," Mr Mutua said.

Mrs Anne Mutahi, Chairperson, Association of Micro-Finance Institutions (AMFI) said a lack appropriate skill was one of the challenges facing MFIs. Participants lauded the University for organizing the conference. SU's Institute of Continuing Education organized the conference in conjunction with AMFI and with support from Equity Bank, Nation Media Group and K-Rep Bank.

The keynote address was given by the Mr Mutua Kilaka on behalf of the Minister for Finance. In the speech the minister reiterated the role of the microfinance sector in Kenya's economic development. "It is estimated that there are already about 10,000 cooperatives and 4,000  savings and credit co-operative organizations in the country, with about four million members compared with two million people that have deposit accounts with the mainstream financial institutions, " he said.

The minister noted that despite the potential of microfinance institutions to contribute in providing a more financially inclusive system, a large percentage of Kenyans still remained excluded. Only 19% of Kenyans use formal banks.

Challenges of developing outreach infrastructure, appropriate products and delivery systems and ensuring financially literate clients need to be solved. The Government recognized these challenges and acknowledged the crucial role that it must play to create an enabling environment so that micro credit providers could move in.  In this regard, the Government was taking a number of actions intended to strengthen the capacity of the micro finance institutions to increase outreach of their services.

First, the Government had enacted the Microfinance Act 2006 to provide legal framework for regulation and supervision of micro finance institutions.  This was necessary, particularly as related to deposit taking micro finance institutions. "We cannot and should not allow any compromise to adoption and maintenance of sound principles and practices in financial intermediation.  Otherwise, we will not be able to have a viable and sustainable micro financing system," the minister said

Second, to reach out to the poor more effectively, the micro finance institutions needed to work very closely with the other financial institutions and other players who provide credit and financial services to small business enterprises.  This was necessary in order to create synergy while avoiding unnecessary duplication and wasteful competition. The challenge to those seeking to assist the poor and less privileged was to work together to accelerate the rate of improvement. 

The conference was also addressed by Ms Rose Detho, Director, Bank Supervision Department, Central Bank of Kenya, on behalf of the Governor. In her speech she encouraged microfinance institutions to be licensed and regulated under the Microfinance Act 2006 noting that those that had been regulated were in a better position with regard to improved efficiency, effectiveness (increased outreach) and long-term sustainability. She singled out the six mainstream institutions that had benefited from regulation and supervision, namely Equity Bank, Cooperative Bank, K-Rep Bank, Family Bank, Kenya Commercial Bank as well as Kenya Post Office Savings Bank.

Ms Rose Detho added that the Ministry of Co-operative Development and Marketing was in the process of preparing law(s) to regulate SACCOs. This would help to arrest the menace of pyramid schemes because a good number of these schemes masquerade as SACCOs. This was in response to the question on fraudulent financial schemes popularly called pyramid schemes that constantly came up. She noted that public awareness and education was the solution to the menace.

Others speakers at the conference included David Cracknell, Africa Programme Director, MicroSave; and Lydia Koros, CEO, Faulu Kenya; Ingrid Munro, Managing Trustee, Jamii Bora; Dr James Mwangi, CEO, Equity Bank and David Ferrand, Director FSD Kenya. The conference attracted 400 participants from both Kenya and Uganda. All public universities and several private universities were represented at the conference, indicating the interest of academics in this sector.

The conference coordinator, Dr Ruth Kiraka, Dean, Institute of Continuing Education thanked all the speakers, participants and sponsors and said that this was just the beginning, and that the Institute would conduct more forums to increase public awareness and raise the profile of the microfinance sector. She challenged young university students and graduates to venture into this sector as a viable career option.

Links: Microfinance Seminar Presentations

See also: http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=3&newsid=111194