Kenya Microfinance Bill 2026: What It Proposes and Its Status
Update — 9 October 2026: The Microfinance Bill, 2026 is proposed legislation, not a change borrowers or lenders should treat as already in force. The latest National Assembly bills tracker available for this update is dated 27 August 2026; it records the Bill’s first reading on 28 May and does not list later readings. Check Parliament’s tracker for any subsequent change.
What the Bill proposes
The Bill would replace the Microfinance Act, 2006 and expand the Central Bank of Kenya’s oversight of microfinance banks. Parliament’s summary describes proposed licensing and capital rules, liquidity and risk controls, governance requirements, CBK inspections and reporting, and consumer protections such as loan disclosures and limits on interest recoverable after default. These are proposals while the Bill is before Parliament. Read Parliament’s Bill summary and the published Bill text.
One debated proposal is raising minimum core capital for microfinance banks from KSh60 million to KSh250 million, with a transition period after enactment. The text also proposes barring non-deposit-taking microfinance businesses from taking deposits or cash collateral. The exact wording and any amendments matter, so readers should consult the Bill rather than rely on headlines.
What the Kenya Bankers Association said
The Kenya Bankers Association (KBA) has argued for a more gradual capital increase and safeguards for certain cash-collateral arrangements. These are the association’s recommendations to Parliament, not provisions already accepted into law. Banks, microfinance providers and borrowers may assess the trade-offs differently: higher capital can strengthen a lender’s capacity to absorb losses, while compliance costs can put pressure on smaller providers and their customers.
The Bill also needs to be kept separate from the Competition (Amendment) Bill, 2026. The earlier version of this article combined KBA’s comments on both Bills, including its views on competition fines. Those competition-law proposals do not form part of the Microfinance Bill.
How to follow the Bill
Use the National Assembly Bill Tracker to check its reading and committee stages. Until Parliament passes a Bill and it receives assent and commencement, proposed clauses are not rules that a microfinance customer should assume are in force. For current licensed-provider information and consumer guidance, visit the Central Bank of Kenya.
We will revise this explainer when Parliament publishes a later tracker, amendments or a final enacted text.
