Structure of the Department

The Division has an overall mandate of overseeing the development of policy, legal and regulatory framework to guide the operations of the Financial Sector that foster stability, efficiency and access to financial services in Kenya. It is the link between the National Treasury and the financial services sector and coordinate the strategic management of the sector. Additionally, the division coordinates the implementation of the Financial Action Taskforce (FATF) standards on AML/CFT and counter proliferation financing, thus ensuring the integrity of the financial system.

The Division is responsible for coordinating and providing policy advisory on sector-specific matters across the economy through the review of sectoral policies, Memoranda of Understanding (MoUs), Bilateral Agreements and Cabinet Memoranda to ensure alignment with national fiscal and economic priorities. It also supports government engagement in regional and international economic cooperation frameworks, including matters relating to regional integration. The Division also undertakes mobilization and coordination of disaster risk financing.

The Credit Guarantee Scheme (CGS) Unit was established in 2020 to design and implement innovative ways of channeling private sector credit to Micro, Small and Medium Enterprises (MSMEs). The Unit manages partial guarantees with participating financial institutions to incentivize lending to MSMEs by commercial banks. Objectives of the CGS include:

1. To improve and stimulate the economy by encouraging additional lending to MSMEs, increasing investment opportunities for MSMEs and strengthening skills and capacities of proprietors of MSMEs.
2. To create a conducive business environment and promote partnerships between the government and financial intermediaries with respect to credit guarantees for MSMEs and other related activities.
3. To facilitate the financing of MSMEs, increasing investment opportunities for MSMEs by partially guaranteeing credit advanced to the enterprises.

The Climate Finance and Green Economy Unit was established 2016 to support the coordination of all climate finance actions in the country. The unit works in close collaboration with the Climate Change Directorate under the Ministry of Environment, Climate Change and Forestry. It serves as a focal point for mobilizing local, national and international financial resources to support climate adaptation and mitigation. The unit is crucial to managing Kenya's transition towards a green economy by ensuring that both public and private investment are directed towards low-carbon and climate resilient development.

a. Rural Kenya Financial Inclusion Facility (RK-FINFA)

RK-FINFA is a six-year development project financed jointly by the International Fund for Agricultural Development (IFAD) and the Government of Kenya (GoK). RK-FINFA supports the transformation of rural and smallholder agriculture sector through private sector-led development by improving the access of the smallholder farmers and rural micro, small and medium enterprises to appropriate financial services.

b. Supporting Access to Finance and Enterprise Recovery

The objective of the Supporting Access to Finance and Enterprise Recovery (SAFER) project is to increase access to financial services, enhance the capabilities, and support the post Covid-19 recovery of MSMEs in Kenya. The project seeks to address market failures in the provision of finance to MSMEs, which have been exacerbated by the negative impact of COVID-19. The project contributes to the implementation of the third element of the 8-Point Economic Stimulus Program unveiled by President Kenyatta on 23rd May 2020. This element focuses on enhancing liquidity to MSMEs through provision of affordable credit in an efficient and structured manner.

c. Financing Locally-Led Climate Action

The Financing Locally Led Climate Action (FLLoCA) Program is Kenya's flagship climate initiative, driving resilience where it matters most, at the grassroots. FLLoCA empowers communities to plan, budget, implement, and monitor their own climate solutions. Through this pioneering model, local communities take the lead in climate adaptation, delivering sustainable, high-impact results that are owned and driven by the people.