His Excellency President Mwai Kibaki gave the Kenyan Microfinance industry a new year gift by assenting to the Microfinance Bill, 2006 a few days before the closure of the year. This means that the Bill is now law and will henceforth be referred to as the Microfinance Act. What made this a truly enjoyable gift is the fact that the microfinance industry has over the last 10 years fought to be allowed to expand the industry by taking local deposits as a source of funds rather than borrowing expensively from international lenders and local wholesale organisations. 

The enactment of this Bill will lead to transformation of  a number of institutions into deposit taking microfinance organisations. What now remains is for the Central Bank to issue prudential regulations for the deposit taking MFIs. This was expected to happen by the middle of March 2007, but with the appointment of a new Governor at Central Bank of Kenya, it may take a little longer. The credit only MFIs (those that do not wish to transform into deposit taking organisations) are also eager to receive the non prudential regulations to be issued by the Ministry of Finance. The microfinance industry will truly be transformed by the enactment of this new law.