The Kenya Microfinance Act, enacted in 2006, is a landmark legislation that aims to promote financial inclusion and access to credit for low-income individuals and micro-enterprises in Kenya. The Act establishes a comprehensive legal and regulatory framework for the establishment, licensing, regulation, and supervision of microfinance institutions (MFIs) in the country. The primary objectives of the Act are: 1. To facilitate the establishment, regulation, and supervision of microfinance institutions in Kenya. 2. To promote the development of an efficient and effective micro-finance sub-sector. 3. To ensure the protection of depositors and customers of microfinance institutions. 4. To provide for the licensing and governance of microfinance institutions. 5. To promote the integration of the micro-finance sub-sector into the mainstream financial system. The Act defines a microfinance institution as a company that provides micro-credit, micro-savings, and micro-insurance services to low-income individuals and micro-enterprises. It outlines the various categories of MFIs, including deposit-taking MFIs and non-deposit-taking MFIs, and sets out the licensing requirements for each category. Under the Act, the Central Bank of Kenya (CBK) is designated as the regulatory and supervisory authority for deposit-taking MFIs, while the Association of Microfinance Institutions (AMFI) is responsible for the regulation and supervision of non-deposit-taking MFIs. The Act establishes the Microfinance Advisory Council, which advises the Minister of Finance and the CBK on matters relating to the micro-finance sub-sector. It also outlines the governance structures and requirements for MFIs, including provisions for the appointment of directors, auditors, and the maintenance of adequate capital and liquidity reserves. Furthermore, the Act addresses consumer protection by requiring MFIs to disclose information on their products, services, and charges to customers. It also provides for the establishment of a deposit insurance fund to protect depositors in the event of an MFI's failure. The Act also introduces provisions for the supervision and inspection of MFIs by the CBK and AMFI, including the power to conduct on-site examinations, impose sanctions for non-compliance, and intervene in troubled MFIs to protect the interests of depositors and customers. Overall, the Kenya Microfinance Act 2006 is a crucial piece of legislation that aims to promote financial inclusion, ensure the stability and soundness of the microfinance sub-sector, and protect the interests of low-income individuals and micro-enterprises in Kenya.