Microfinance Act

Section 1. Short title Section This Act may be cited as the Microfinance Act.

Section 2. Interpretation Section an institution’s place of business operated within premises or structure owned or occupied by a third party by means of an agreement between the institution and the third party in the provision of deposit-taking microfinance business; or

Section 3. Application Section 3(1)(a) every deposit-taking microfinance business ; Section 3(1)(b) a non-deposit-taking microfinance business in the manner prescribed under subsection (2)(a) unless exempted under subsection (2)(b) . Section 3(2)(a) prescribing measures for the conduct of nondeposit-taking microfinance business; and Section 3(2)(b) exempting any non-deposit-taking microfinance business from application of this Act. Section 3(2A) Despite subsection (2)(b) , an exemption shall not be granted to a non-deposit taking microfinance business whose annual revenue exceeds five hundred thousand shillings. Section 3(3)(a) a bank , a financial institution or a mortgage finance company licensed under the Banking Act ( Cap. 488 ); Section 3(3)(b) a building society registered under the Building Societies Act ( Cap. 489 ); Section 3(3)(c) the Kenya Post Office Savings Bank established under the Kenya Post Office Savings Bank Act ( Cap. 493B ).

Section 4. Qualifications for carrying outdeposit-taking microfinance business Section 4(1)(a) a company registered under the Companies Act ( Cap. 486 ) whose main objective is to carry out such business; or Section 4(1)(b) a wholly-owned subsidiary of a bank or a financial institution whose main objective is to carry out such business; and Section 4(1)(c) licensed under this Act. Section 4(2) The provisions of subsection (1) shall not apply to a duly approved agency conducting deposit-taking business on behalf of an institution . Section 4(3) Where an agency conducts deposit taking business on behalf of an institution in accordance with this Act, the institution shall be liable for the acts of the agency in so far as such acts relate to that business. Section 4(4) A person who contravenes the provisions of this section commits an offence and shall be liable, on conviction, to a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both. [Act No. 10 of 2010 , s. 83.]

Section 5. Application for licence Section 5(1) An application for a licence to carry out deposit-taking business or non-deposit-taking microfinance business shall be made to the Central Bank , in the prescribed form. Section 5(2)(a) copy of the memorandum and articles of association or other instrument under which the company is incorporated; Section 5(2)(b) a verified official notification of the company’s registered place of business ; Section 5(2)(c) the prospective place of operation, indicating that of the head office and branches, if any; Section 5(2)(d) evidence that the company meets the minimum capital requirements prescribed in the Schedule; Section 5(2)(e) the prescribed fee; and Section 5(2)(f) objectives of the business; Section 5(2)(f)(i) objectives of the business; Section 5(2)(f)(ii) domestic economic situation; Section 5(2)(f)(iii) financial sector environment; Section 5(2)(f)(iv) legal framework; Section 5(2)(f)(v) risk analysis; Section 5(2)(f)(vi) economic and financial analysis; Section 5(2)(f)(vii) organizational structure; Section 5(2)(f)(viii) proposed management, detailing the professional qualifications, skills and relevant experience in deposit-taking bu...

Section 6. Issuance or renewal of licence Section 6(1) The Central Bank shall consider every application made under section 5 and may, if satisfied that the applicant meets the requirements of this Act, grant a licence to the applicant upon payment of the prescribed fee. Section 6(2) The Central Bank may endorse on a licence granted under this section, such conditions as it considers necessary and may, from time to time, add, vary or substitute such conditions. Section 6(3) A licence issued under this Act shall, unless earlier revoked, be valid up to the 31st day of December of the year in which it is issued and may, on expiry, be renewed on application: Provided that where an application for its renewal is made, the licence shall be deemed to continue in force until the application is determined. Section 6(4)(a) made within three months of the expiry of the licence: Provided that a late application may be made upon payment of such penalty as may be prescribed; Section 6(4)(b) accompanied by the particulars specified in section 5 (2); and Section 6(4)(c) be considered in the same manner as an application under section 5 . Section 6(5) Subject to subsection (4) the Central Bank may...

Section 7. Categories ofdeposit-taking business Section For the purposes of this Act, the Cabinet Secretary may prescribe categories of deposit-taking business based on geographical, administrative or such other criteria as the Cabinet Secretary may deem necessary.

Section 8.Central Bank’s power of inspection Section The Central Bank may, under a warrant issued by the High Court, enter any premises and examine the books, accounts or records of any person whom the Central Bank , on reasonable grounds, believes to be carrying out deposit-taking business contrary to the provisions of this Act.

Section 9. Revocation of licence Section 9(1)(a) the licensee ceases to carry on deposit-taking business or non-deposit-taking microfinance business ; Section 9(1)(b) the institution is wound up, liquidated or otherwise dissolved; Section 9(1)(c) the Central Bank is reasonably satisfied that the business of the institution is being conducted in a manner detrimental to the interests of its depositors or customers; Section 9(1)(d) the institution has been amalgamated with another company or has been sold or its assets or liabilities have been transferred to another company without the approval of the Cabinet Secretary ; Section 9(1)(e) the licensee has contravened any of the conditions in the licence; or Section 9(1)(f) the licensee has contravened any of the provisions of this Act or any regulations made thereunder. Section 9(2) The Central Bank shall cause the names of institutions whose licences have been revoked to be published in the Gazette within seven days of the revocation. [Act No. 20 of 2024 , s. 17.]

Section 10. Restriction of a licence Section 10(1) Where it appears to the Central Bank that there are reasonable grounds for the revocation of a licence, but that the circumstances are such as not to justify a revocation, the Central Bank may restrict the licence in accordance with subsection (2) . Section 10(2)(a) a limit on the duration of the licence for a period, not exceeding one year; or Section 10(2)(b) such additional conditions for the protection of depositors as the Central Bank may deem necessary.

Section 4A. Qualifications for carrying out non-deposit-taking microfinance business Section 4A(1)(a) a company registered under the Companies Act whose main objective is to carry out a non-deposit taking microfinance business; and Section 4A(1)(b) licensed under this Act. Section 4A(2) A person who contravenes the provisions of this section commits an offence and shall be liable, on conviction, to a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both. [Act No. 20 of 2024 , s. 15.]

Section 11. Minimum capital requirements Section 11(1) An institution shall maintain the minimum capital requirements set out in the Schedule. Section 11(2) The Cabinet Secretary may, by order in the Gazette , amend the Schedule.

Section 12. Minimum liquid assets Section 12(1) An institution shall maintain such minimum holding of liquid assets as may be prescribed by the Central Bank . Section 12(2)(a) notes and coins which are legal tender in Kenya; Section 12(2)(b) balances held at banks after deducting therefrom any balance owed to those banks; Section 12(2)(c) treasury bills and bonds which are freely marketable and re-discountable at the Central Bank ; or Section 12(2)(d) such other assets as the Central Bank may specify. Section 12(3) An institution which does not comply with the requirements of subsection (1) , within such period as the Central Bank may prescribe, shall be liable to pay, on being called upon to do so by the Central Bank , a penalty interest charge not exceeding one per cent of the amount of the deficiency, for every day during which the offence continues.

Section 13. Place of business Section 13(1)(a) open a branch or place of business outside Kenya; or Section 13(1)(b) open or close a branch or place of business in Kenya without the prior approval of the Central Bank . Section 13(2) A person who contravenes the provisions of this section commits an offence and shall be liable, on conviction, to a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both. Section 13(3) The Central Bank may make regulations to prescribe the manner in which approvals shall be granted under this section. [Act No. 10 of 2010 , s. 84.]

Section 14. Prohibited activities Section 14(1)(a) deleted by ActNo. 41 of 2013, s. 3 ; Section 14(1)(b) deleted by ActNo. 41 of 2013, s. 3 ; Section 14(1)(c) deleted by ActNo. 41 of 2013, s. 3 ; Section 14(1)(d) trust operations; Section 14(1)(e) investing in enterprise capital; Section 14(1)(f) wholesale or retail trade; Section 14(1)(g) underwriting or placement of securities; Section 14(1)(h) purchasing or otherwise acquiring any land except as may be reasonably necessary for the purpose of expanding the deposit-taking business ; or Section 14(1)(i) such other activity as the Central Bank may prescribe. Section 14(2) A person who contravenes the provisions of this section commits an offence and shall be liable, on conviction, to a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both. [Act No. 41 of 2013 , s. 3.]

Section 15. Declaration of dividends Section 15(1) No institution shall pay dividends on its shares or make any other form of distribution to its shareholders until all its capitalized expenditure has been written off and provision has been made for bad and doubtful debts in accordance with subsection (2) . Section 15(2)(a) make provision for bad and doubtful debts before any profit or loss is declared; and Section 15(2)(b) ensure that such provision is adequate in accordance with such guidelines as may be prescribed by the Central Bank . Section 15(3) A person who contravenes the provisions of this section commits an offence and shall be liable, on conviction to a fine not exceeding fifty thousand shillings, or to imprisonment for a term not exceeding two years, or to both.

Section 16. Application for loan or credit facility Section 16(1) Any person may apply to an institution or non-deposit-taking microfinance business for a loan or credit facility. Section 16(2) A person who applies for a loan or credit facility under subsection (1) shall provide evidence of his ability to repay the loan or credit facility. [Act No. 20 of 2024 , s. 18.]

Section 17. Limit on loans and credit facilities Section 17(1) No institution shall grant a loan or credit facility to an end-user single borrower or his associates where the loan or credit facility, in the aggregate, exceeds such limit of its core capital as the Central Bank may prescribe. Section 17(2) No institution shall grant a loan or credit facility against the security of the shares of its deposit-taking business . Section 17(3) Any person who contravenes the provisions of this section commits an offence and shall be liable, on conviction, to a fine not exceeding fifty thousand shillings, or to imprisonment for a term not exceeding two years, or to both. [Act No. 4 of 2012 , s. 54.]

Section 18. Insider lending Section 18(1) No institution shall grant a loan or credit facility to its associate , or to an officer or member of staff of the institution , or their associates, in excess of such limits as the Central Bank may, by regulations, prescribe. Section 18(2) Any person who contravenes the provisions of this section commits an offence and shall be liable, on conviction, to a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both. [Act No. 4 of 2012 , s. 55.]

Section 19. Limit on shares Section 19(1) Subject to subsections (2) and (3) , no person shall hold, directly or indirectly, or otherwise have a beneficial interest in, more than twenty-five per cent of the shares of an institution . Section 19(2)(a) comply with the requirements of subsection (1) within four years of the business being licensed; and Section 19(2)(b) present a plan of action for the reduction of the shareholding at the time the application for the initial licence of the business is made. Section 19(3)(a) a wholly-owned subsidiary of a bank or a financial institution ; Section 19(3)(b) any other company which the Cabinet Secretary may, on the recommendation of the Central Bank , specify. Section 19(4) No person shall transfer, or cause to be transferred, more than ten per cent of the shares of an institution except with the prior approval of the Central Bank . Section 19(5) Where any share is held by a company or other corporate body, or by a nominee on behalf of another person, the company or other corporate body, or the nominee, as the case may be, shall disclose to the Central Bank the full particulars of the individual person who is the ultimate beneficial owner...

Section 20. Management of institutions Section 20(1) Every institution shall be managed by a Board of Directors consisting of not less than five Directors. Section 20(2)(a) is approved by the Central Bank for that purpose; and Section 20(2)(b) is not disqualified from holding office as such under this Act. Section 20(3) The Board of Directors shall elect a non-executive Chairperson from amongst their number. Section 20(4) The Board of Directors may, in writing, delegate, any of the powers to the Board to any Director or to any other officer of the institution .

Section 21. Disqualifications of Directors Section is a minor or is under a legal disability;

Section 22. Disqualifications of officers Section 22(1)(a) an undischarged bankrupt or enters into a composition or scheme of arrangement with his creditors; Section 22(1)(b) convicted of an offence involving fraud or dishonesty; or Section 22(1)(c) removed from office under the provisions of this Act. Section 22(2) Any person who continues to act as an officer after being disqualified under this section commits an offence.

Section 23. Financial year Section The financial year of an institution shall be the period of twelve months ending on the 31st day of December in each year.

Section 24. Form of accounts Section 24(1) All entries in any books of accounts and all accounts kept by an institution shall be recorded in the English language and in the system of numerals employed in government accounts. Section 24(2)(a) show a true and fair state of affairs; Section 24(2)(b) explain all transactions and financial positions to enable the Central Bank determine whether the institution has complied with the provisions of this Act.

Section 25. Accounts to be denominated in shillings Section the Companies Act ( Cap. 486 );

Section 26. Submission of accounts to theCentral Bank Section 26(1)(a) an audited balance sheet, showing its assets and liabilities; Section 26(1)(b) an audited profit and loss account; and Section 26(1)(c) a copy of the auditor’s report. Section 26(2) Any person who contravenes the provisions of this section commits an offence.

Section 27. Disclosures in financial statements Section the persons, if any, who hold more than twenty-five per cent of the total shares of the institution ;

Section 28. Appointment of internal auditor Section 28(1) Every institution shall appoint an internal auditor who shall report to the Board of Directors on the financial matters of the institution . Section 28(2) No person shall be appointed as an internal auditor under this section unless the person holds such professional qualifications in accounting and has such experience in deposit-taking microfinance business , as may be prescribed.

Section 29. Appointment of external auditor Section 29(1) An institution shall, in each year, appoint an external auditor who shall be a person qualified under section 30 and approved for appointment as such by the Central Bank. Section 29(2) The external auditor shall audit the accounts of the institution and shall make a report on the annual balance sheet and profit and loss account to be submitted to the Central Bank . Section 29(3) An institution shall not remove or change its external auditor except with the prior approval of the Central Bank . Section 29(4) An external auditor shall make a report to the Board of Directors identifying key concerns with respect to the financial condition of the business. Section 29(5) An external auditor shall, not less than four months after the end of each financial year, submit an audit report to the Central Bank , on the financial condition of the business. Section 29(6)(a) solvency of the business; Section 29(6)(b) any violation of prudential standards or a condition imposed on the licence; and Section 29(6)(c) any other contravention of this Act. Section 29(7)(a) to submit such additional information in relation to his audit as the Centra...

Section 30. Qualifications of an external auditor Section is qualified as an auditor under the Companies Act ( Cap. 486 ); and

Section 31. Exhibition and publication of audited accounts Section 31(1) An institution shall exhibit, throughout the year, in a conspicuous position in every office and branch , a copy of its last audited financial statements and shall, within four months of the end of each financial year, cause a copy of the balance sheet and profit and loss account for that year to be published in a national newspaper, in such form as the Central Bank may prescribe. Section 31(2) An institution that does not comply with the provisions of this section shall be liable to pay to the Central Bank such penalty, not being less than one hundred thousand shillings, as may be prescribed.

Section 32. Rectification of audited accounts Section amend the audited accounts to comply with the Act;

Section 33. Collection and furnishing of information by theCentral Bank Section 33(1) The Central Bank shall collect such data and other information as may be necessary to enable it maintain supervision and surveillance of the affairs of an institution and its agencies and the protection of depositors and, for that purpose, the Central Bank may require an institution and its agencies to submit statistical and other returns on a periodic basis in addition to any other returns required by law. Section 33(2) The Central Bank may require any institution and its agencies to furnish it with such information as it may reasonably require for the proper discharge of its functions under this Act. Section 33(3) The information required to be furnished under subsection (2) may include information relating to any company which is an affiliate, an associate or a holding company of the institution and its agencies required to furnish information under that subsection. Section 33(4) The Cabinet Secretary may require the Central Bank or an institution and its agencies to furnish to the Cabinet Secretary , at such time and in such manner the Cabinet Secretary may direct, such information as the Cabi...

Section 34. Publication of information Section 34(1) Subject to subsection (2) , the Cabinet Secretary may publish in the Gazette , in whole or in part, any information furnished to him or to the Central Bank under this Act. Section 34(2) No information shall be published under subsection (1) if it would disclose the financial affairs of any person, except with the prior consent, in writing, of that person. Section 34(3) Except as provided in this Act, no person shall disclose or publish any information which comes into his possession as a result of the performance of his duties under this Act. Section 34(3A) The Deposit Protection Fund Board , institutions licensed under this Act and institutions licensed under the Banking Act ( Cap. 488 ) shall, in the ordinary course of business and in such manner and to such extent as the Cabinet Secretary may, in regulations, prescribe, exchange such information on performing and non performing loans as may, from time to time, be specified by the Central Bank in regulation. Section 34(4) The Central Bank institutions licensed under this Act and institutions licensed under the Banking Act ( Cap. 488 ) may, in the ordinary course of business, in...

Section 22A. Assessment of officers Section 22A(1) Notwithstanding any other provision of this Act, the Central Bank may, from time to time, where it deems it necessary to do so, carry out an assessment of the professional and moral suitability of a person managing or controlling an institution . Section 22A(2) An assessment under this section shall be in accordance with such criteria as may be prescribed. Section 22A(3) Where, upon an assessment under this section, the Central Bank is satisfied as to the professional and moral suitability of the person managing or controlling an institution , it shall so certify in writing to the institution . Section 22A(4) A person who, upon an assessment under this section, is not certified by the Central Bank as fit and proper to manage or control an institution , shall be deemed to be disqualified from holding office and shall cease to hold office. [Act No. 4 of 2012 , s. 58.]

Section 35. Inspection of institutions Section 35(1) The Central Bank may, at any time, and shall, if so directed by the Cabinet Secretary , cause an inspection of an institution and its agencies to be made by any person authorized by the Central Bank in writing. Section 35(2) When an inspection is made, the institution concerned or agency and every officer or employee thereof shall produce and make available to the person making the inspection, all the books, accounts, records and other documents of the deposit-taking business and such correspondence, statements and information relating to the business as the person making the inspection may require, within such period as he may direct in writing. Section 35(3) A person who fails to produce any books, accounts, records, documents, correspondence, statements or other information required under subsection (2) , within the period specified in the relevant direction, commits an offence. Section 35(4)(a) any breach or contravention of this Act and any regulations made thereunder; Section 35(4)(b) any irregularity in the manner of conduct of the inspected institution ; Section 35(4)(c) any mismanagement of the institution ; and Section...

Section 36. Periodic returns Section 36(1) The Central Bank may require an institution to furnish it with periodic reports of its business operations in such form as the Central Bank may prescribe. Section 36(2)(a) compliance by the institution with the prescribed capital requirements; Section 36(2)(b) the composition and quality of assets and liabilities; Section 36(2)(c) the quality of its earning assets; Section 36(2)(d) the adequacy and performance of its management; Section 36(2)(e) any other matter which, in the opinion of the Central Bank , is relevant to the discharge of its supervisory role under this Act.

Section 37. Power of Central Bank to intervene in management Section 37(1)(a) the institution has contravened the provisions of this Act or the conditions upon which its licence was granted; Section 37(1)(b) the business of the institution is being conducted in a manner detrimental to the interests of its depositors or creditors; Section 37(1)(c) the institution has failed to maintain the prescribed minimum core capital; Section 37(1)(d) the institution has insufficient assets to cover its liabilities; Section 37(1)(e) if the institution is significantly undercapitalized; or Section 37(1)(f) if an institution fails to submit a capital restoration plan or a plan to resolve all deficiencies as directed under section 36B or to add more capital and the institution fails, refuses or neglects to comply with the order or to implement a plan of correction. Section 37(2) The Central Bank shall, before intervening in the affairs of an institution under subsection (1) , issue the institution with a notice specifying the defaults noted in the conduct of the business and require the institution to take remedial action within such reasonable period as may be specified in the notice in order to c...

Section 36A. Powers upon audit or inspection report Section restrict, suspend or prohibit the payment of dividends by the institution;

Section 36B. Powers on anti-money laundering, combating the financing of terrorism and countering proliferation financing matters Section 36B(1) Pursuant to sections 2A , 36A , 36B and 36C of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ), the Central Bank shall regulate, supervise and enforce compliance for anti-money laundering, combating the financing of terrorism and countering proliferation financing purposes by all reporting institutions regulated and supervised by the Central Bank and to whom the provisions of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ) apply. Section 36B(2)(a) vet proposed significant shareholders, proposed beneficial owners, proposed directors and senior officers of a reporting institution ; Section 36B(2)(b) conduct onsite inspection; Section 36B(2)(c) conduct offsite surveillance; Section 36B(2)(d) undertake consolidated supervision of an institution and its group; Section 36B(2)(e) compel the production of any document or information the Central Bank may require for the purpose of discharging its supervisory mandate under the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ); Section 36B(2)(f) impose mon...

Section 36C. Penalties for violations relating to money laundering, terrorism financing Section 36C(1) No institution , director, officer , employer, agent or any other person shall violate or fail to comply with any provision of the Proceeds of Crime and Anti-Money Laundering Act ( Cap. 59A ), or any regulation, guideline, rule, direction or instruction issued under the said Act or under this section. Section 36C(2)(a) in case of a legal person, to a penalty not exceeding five million shillings; Section 36C(2)(b) in the case of a natural person, to a penalty not exceeding one million shillings; and Section 36C(2)(c) to additional penalties not exceeding one hundred thousand shillings in each case for each day or part thereof during which such violation or non-compliance continues.

Section 38. Liquidation of aninstitutionby theCentral Bank Section 38(1) Where an institution becomes insolvent, the Central Bank may appoint the Deposit Protection Fund Board to be a liquidator of the institution and the appointment shall have the same effect as the appointment of a liquidator by the High Court under the provisions of the Companies Act ( Cap. 486 ). Section 38(2) Any reference in the Companies Act ( Cap. 486 ) to the “relevant date” and “commencement of the winding-up” shall be deemed to be a reference to the date on which the Deposit Protection Fund Board is appointed as liquidator. Section 38(3)(a) it is unable to pay its debts within the meaning of the Companies Act ( Cap. 486 ); Section 38(3)(b) a winding-up order is made against the institution or a resolution of creditors to voluntarily wind up the business is passed under the Companies Act ( Cap. 486 ); Section 38(3)(c) the institution is unable to pay sums due and payable to its depositors; or Section 38(3)(d) the Central Bank determines that the value of the assets of an institution is less than the amount of its liabilities. Section 38(4) In exercising its functions under this section, the Deposit Protec...

Section 39. Contributions to the Deposit ProtectionFund Section 39(1) All institutions shall contribute to the Deposit Protection Fund . Section 39(2) An institution shall pay into the Deposit Protection Fund , such annual amount and at such times as the Deposit Protection Fund Board may prescribe. Section 39(3) Notwithstanding subsection (2) , where it appears to the Deposit Protection Fund Board that the affairs of an institution are being conducted in a manner detrimental to the interests of the deposit-taking business or of the depositors of the institution , the Deposit Protection Fund Board may increase the contributions of that institution beyond the prescribed maximum. Section 39(4) An institution that does not contribute to the Deposit Protection Fund within the period prescribed under subsection (2) shall be liable to pay to the Fund a penalty interest charge, not exceeding one-half per cent of the unpaid amount, for every day during which the amount remains unpaid. Section 39(5) The Deposit Protection Fund Board shall cause a list of all institutions whose deposits are protected to be published in the Gazette annually.

Section 40. Protection of deposits Section 40(1) The Deposit Protection Fund Board shall, by order in the Gazette , determine the amount of the balance to be maintained by a customer of an institution , as a protected deposit . Section 40(2) A customer of an institution may, upon the institution becoming insolvent, lodge a claim with the Deposit Protection Fund Board , in such form as the Deposit Protection Fund Board may approve, for payment to the customer out of the Fund of any protected deposit which the customer would, but for the insolvency, have been paid had the customer demanded payment from the insolvent institution . Section 40(3) The Deposit Protection Fund Board may, before paying any claim lodged under subsection (2) , require the claimant to furnish such documentary proof as may be proper to show that the customer is entitled to payment out of the Fund . Section 40(4) The Deposit Protection Fund Board may decline to make any payment under this section to a person who in its opinion, had any responsibility for or may have profited directly or indirectly from the circumstances leading to the institution becoming insolvent. Section 40(5) The Deposit Protection Fund Boar...

Section 41. Rights of Board on insolvency Section Whenever an institution is closed or becomes insolvent, the Deposit Protection Fund Board shall be entitled to receive any notice or other document required to be sent to a creditor of the institution , and a duly authorized representative of the Deposit Protection Fund Board shall be entitled to attend any meeting of creditors of the institution .

Section 42. Right of assignment Section 42(1) A liquidator may assign the assets or liabilities of an institution or of a customer under this Act, or the Companies Act ( Cap. 486 ) or under any other written law to third parties for the benefit of the creditors and depositors of the institution under liquidation. Section 42(2) The right of assignment conferred by this section shall override all other rights and interests of parties under contracts of employment, leases, charges, mortgages or any other agreements the institution may have entered into before going into liquidation.

Section 43. Declaration of holidays Section Where the Cabinet Secretary considers that it is in the public interest that all institutions, or a particular institution should remain closed on a day which is not a public holiday, the Cabinet Secretary may, by notice in the Gazette , declare that day to be a holiday for all institutions or for the particular institution , and all institutions or the particular institution shall remain closed on that day.

Section 44. Orders by the High Court Section 44(1)(a) prohibiting the institution from carrying on business; or Section 44(1)(b) staying the commencement or continuance of any action or any proceedings against the institution for a specified period of time on such terms and conditions as the High Court considers reasonable and may extend the specified period up to a total of six months from the beginning of the stay. Section 44(2) Where an order is made under subsection (1)(a) , a licence granted under this Act shall be deemed to be suspended.

Section 45. Restriction on use of words “deposit-taking microfinance business” Section 45(1) No person shall use the word “ deposit-taking microfinance business ” or any of its derivatives or any other words indicating the transaction of deposit-taking business or the equivalent, in the name, description or title under which it transacts business in Kenya or make any representation that the person transacts deposit-taking business unless such person is licensed under this Act. Section 45(2) Where a company registered under the Companies Act ( Cap. 486 ) as a microfinance bank fails to acquire a licence to operate under this Act within a period of one year from the date of such registration, the company shall forthwith cease the use of the words " microfinance bank " in its name. Section 45(3) Any person who contravenes the provisions of this section commits an offence. [Act No. 4 of 2012 , s. 60, Act No. 41 of 2013 , s. 8.]