CENTRAL BANK OF KENYA
Opening Remarks
BY
PROF. NJUGUNA NDUNG‟U
GOVERNOR, CENTRAL BANK OF KENYA
at
A CONVENING CO-HOSTED BY THE BILL & MELINDA GATES FOUNDATION,
THE CENTRAL BANK OF KENYA, AND THE FINANCIAL SERVICES
VOLUNTEER CORPS
on
„PROMOTING FINANCIAL INTEGRITY AND FINANCIAL
INCLUSION:
LESSONS FROM THE KENYAN EXPERIENCE‟
Fairmont Norfolk Hotel, Nairobi
January 30, 2012

Mr. Joseph Kinyua, CBS, Permanent Secretary, Ministry of
Finance;
Mr. Andrew Spindler, President and CEO, Financial Services
Volunteer Corps;
Ms. Claire Alexandre, Senior Program Officer, Bill & Melinda Gates
Foundation;
Distinguished Guests and Colleagues;
Ladies and Gentlemen;
1. I am happy to participate at this important conference, as one of the
organizers, jointly with Financial Services Volunteer Corps (FSVC) and the
Bill and Melinda Gates Foundation.
2. But this morning I have a simple task, to welcome our Chief Guest, the
Permanent Secretary, Ministry of Finance to make the keynote address and
to officially open the conference. But before I ask him to come to the
podium, let me make a few remarks.
3. Let me begin by extending a very warm welcome to all the conference
participants. To the participants who are drawn from beyond our borders,
it is my sincere hope that your stay with us shall be enjoyable and that you
will carry with you pleasant memories of Kenya when you return to your
respective countries.
4. Ladies and Gentlemen, The theme of this conference; “Promoting
Financial Integrity and Financial Inclusion: Lessons from the
Kenyan Experience” is quite timely. It touches upon issues that are key
to the mandate of the Central Bank of Kenya of ensuring financial access,
and the stability and integrity of the financial system.
5. This conference has been organized to further the FSVC’s objective of
developing sound financial systems in emerging economies. The FSVC
recently launched a program to support the development of an Anti-Money
Laundering and Combating the Financing of Terrorism (AML/CFT) regime
in Kenya that is both effective and compatible with the objectives of
financial inclusion. Under this program, it is envisaged that the FSVC will
undertake AML/CFT training and capacity building programs in
consultation with the Central Bank, Ministry of Finance and other players
in the financial sector.
Financial Inclusion

6. Ladies and Gentlemen; The Central Bank of Kenya, in recognition of
the critical role that financial inclusion plays in fighting poverty, promoting
savings-investment cycles and economic development, has been at the forefront of pushing the financial inclusion agenda. The support we have
received from the Bill and Melinda Gates Foundation and AFI has been
enormous on these initiatives.
7. The critical mandate of the Central Bank is to ensure that the financial
sector is stable, efficient and accessible. In this regard, the Central Bank of
Kenya, jointly with other players, has undertaken several initiatives and
reforms aimed at boosting financial inclusion through an appropriate
financial infrastructure that includes: licensing of deposit taking
microfinance institutions (DTMs) and credit reference bureaus (CRBs);
mobile phone financial services and the agency banking model.
8. Ladies and Gentlemen; these initiatives and reforms have led to notable
improvements in the levels, reach and depth of access to financial services
especially among the lower population segments. The results in terms of
numbers are astounding with deposit accounts growing tremendously over
the years. But such a vibrant sector requires to be safeguarded; that is why
financial integrity becomes important.
Financial Integrity
9. Ladies and Gentlemen; success in financial inclusion has to go hand in
hand with financial integrity. The Central Bank of Kenya continually seeks
to enhance the regulation and supervision of the financial system in order
to improve its integrity. As part of our efforts in ensuring appropriate and
effective oversight, we first issued AML Guidelines in 2000. These
Guidelines were revised in 2006 and are currently in the process of being
reviewed to reflect the prevailing international best practice and to align
them with the Proceeds of Crime and Anti-Money Laundering Act, 2009
(POCAMLA).
10. Over the last 2 years, the Central Bank has issued regular AML/CFT
guidelines to financial institutions to further support and enhance the

implementation of the Proceeds of Crime and Anti-Money Laundering Act,
2009 (POCAMLA). The guidelines have covered the operationalization of
the AML Act, Suspicious Transaction Reporting, and measures to be
adopted by financial institutions to combat the financing of terrorism. The
Central Bank has also revised the Forex Bureau Guidelines so as to align
these guidelines to the AML Act. We are also working on Hawala system to
formalize and issued guidelines. On the microfinance front, the
Microfinance Regulations and the Agency Guidelines require Deposit
Taking Microfinance Institutions and their agents to implement AML/CFT
measures.
11. These measures demonstrate that as we push the frontiers of financial
inclusion, we are also taking the requisite steps to ensure that the measures
put in place take into account the need to safeguard the integrity of the
financial system.
12. In November 2011, Parliament enacted the National Payments System Act.
This Act provides CBK with oversight of the national payments system. It
aims to bring all payment service providers including mobile phone service
providers offering money transfer services, within one regulatory
framework. Going forward, the inclusion of these mobile phone service
providers within the supervisory and regulatory scope of CBK will no doubt
enhance the country’s AML/CFT measures.
13. It is my hope therefore, that this conference and the initiative being
launched by the Financial Services Volunteer Corps will contribute to a
greater understanding of the subject and will generate frontier ideas of
enforcing and enhancing AML/CFT measures.
14. It is now my pleasure to invite the Permanent Secretary, Ministry of
Finance, Bw. Joseph Kinyua, to officially open this conference.
THANK YOU