Kenya's microfinance troubles.

Position:Brief Article

The popularity of microcredit in Kenya is declining. And the main problem is not that microcredit doesn't work-success has been a main feature of this financial product all over the world-but that there have been serious abuses of the concept in Kenya.

Customers complain of microfinance companies taking deposits. Microfinance companies are typically organized to only lend money. Deposits are part of the process.

Typical of the abuses encountered in Kenya are companies that hold themselves out as true microfinance institutions asking for deposits to secure a loan. When the customer wants to withdraw the deposit, the company won't...

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