Did you know a microfinance loan is more expensive than a commercial bank one? In Kenya, banks and microfinance institutions (MFIs) play critical roles in the financial sector, catering to different population segments. Banks primarily serve larger businesses and individuals with stable incomes. MFIs focus on providing financial services to low-income individuals and small businesses, mostly excluded from the formal banking system. This article delves into the differences between banks and microfinance institutions in Kenya, highlighting their unique roles, services, and impacts on financial inclusion. Definition and Roles of Banks and MFIs in Kenya Banks Banks are formal financial institutions that provide a wide range of financial services, including accepting deposits, offering loans, and providing payment and investment services. They are regulated by the Central Bank of Kenya (CBK) and cater to individuals, businesses, and corporations. Banks play a pivotal role in th...