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What is a non-deposit taking (credit only) microfinance?

A non-deposit taking institution, also known as a credit only entity is an institution that does not take
any form of deposit or cash collateral from any person.

This type of microfinance institution is not provided for in the Microfinance Act, Kenya and is therefore
not regulated by the Central Bank of Kenya. It therefore requires minimum operating licenses.

Mode of registration for a non-deposit taking Microfinance in Kenya

Non-Deposit taking institutions in Kenya require to be registered as Private Limited Companies. The
Registrar of Companies in Kenya will however not approve the registration of such a company without a
letter of no objection from the Central Bank of Kenya.

This means that the Central Bank of Kenya has to approve the proposed name of the company and the
ownership of the company before the Registrar of Companies can proceed to have the company entered
into the Register of Companies in Kenya.

In order for the Central Bank of Kenya to issue a letter of no objection, the company in-incorporation will
have to fulfill certain requirements and submit the following documents;

 A copy of the name reservation of the proposed company from the Registrar of Companies. This
should be certified by an Advocate or Commissioner for Oaths.
 A copy of the registration details of the company as submitted to the Registrar of Companies
through the e-Citizen platform. The details, which are captured in 8 -10 pages, should indicate
amongst others the name(s) of the shareholder(s) and the proposed business activities of the
entity. Applicants will be required to liaise with the Registrar of Companies to get directions on
how they can be able to download or screen print the copies of the registration documents. The
copies of the registration documents should be certified by an Advocate or a Commissioner for
Oaths.
 A brief background on the shareholders’ business or economic activities.
 A declaration by the individual shareholders on the sources of funds. The declaration should be
certified by an Advocate or a Commissioner of Oaths.
 Documentary evidence of the sources of funds.
 An affidavit confirming that the funds to be deployed to the proposed company are not proceeds
of crime. The affidavit should be certified by an Advocate or a Commissioner of Oaths.
 Applicants are required to indicate whether any of the shareholders or directors of the proposed
entity are employees (including directors) of any entity regulated by the Central Bank of Kenya.