Agency Banking and Deposit Taking Microfinance Institutions' role in financial service provision has continued to count for the steady growth in the financial sector in the country. Bank agents employed by banks have raised the number of transactions undertaken in the sector for the three months ending September 30th.

According to Central Bank of Kenya Banking Sector Performance report, as at 30^th September 2012, there were 10 commercial banks in the country that had contracted 14,168 active agents facilitating over 24.7 million transactions valued at KES 144.2 billion. This was an increase from 9 banks that had contracted 12,054 active agents facilitating over 18.7 million transactions valued at KES 93.1 billion in June 2012.

Deposit Taking Microfinance Institutions

 In the period to 30th September 2012, 6 Deposit Taking Microfinance Institutions (DTMs) were in operation and had gross loans worth KES 19.1 billion compared to KES 17.9 billion registered in June 2012 thus translating to a growth of 6.7%. According to the Central Bank, the deposits base stood at KES 13.8 billion representing a growth of 12.2% from KES 12.3 billion in June 2012.

The long-term borrowings by DTMs increased from KES 6.4 billion in June 2012 to KES 7.0 billion in September 2012. The number of DTMs deposit accounts and loan accounts stood at 1.7 million and 0.48 million respectively in September 2012 compared to 1.6 million deposit accounts and 0.47 million loan accounts registered at end of June 2012.

Credit Reference Bureaus

In the 3 months to September 3oth, the number of credit reports requested by institutions stood at 2,036,634 up from 1,774,185 reports in June 2012, representing an increase of 14.8% or 262,449 reports. Over the same period, the number of reports requested by customers increased from 10,032 to 13,510 reports.

The uptake of credit reports by banks demonstrates the importance of credit information sharing initiative as one of the mechanisms that CBK says will go a long way in mitigating credit risk in the Kenyan banking sector.

There are two Credit Reference Bureaus authorized by the Central Bank to operate in Kenya. These are Credit Reference Bureau Africa Ltd and Metropol Credit Reference Bureau Ltd.