CENTRAL BANK OF KENYA
Remarks
by
PROF. NJUGUNA NDUNG’U
GOVERNOR
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Windsor Golf Hotel and Country Club, Nairobi
September 14th, 2009

Remarks at during the 2009 Alliance for Financial Inclusion (AFI) Global Policy Forum – September 14, 2009
The Right Honourable Prime Minister of the Republic of Kenya,
Mr. Raila Odinga;
The Deputy Prime Minister and Minister for Finance of the
Republic of Kenya, Mr. Uhuru Kenyatta;
Permanent Secretaries here present;
Dr. Alfred Hannig, Executive Director, Alliance for Financial
Inclusion;
Distinguished Guests;
Ladies and Gentlemen:
Right Honourable Prime Minister, let me thank you most sincerely for
gracing this important Forum. Your personal presence demonstrates the
seriousness with which the Government of Kenya takes the role of the
financial sector in the process of our nation’s economic development. May I
also heartily thank the Alliance for Financial Inclusion (AFI) for choosing to
host its inaugural Global Policy Forum in Nairobi. This is indeed a very
great honour to our country. I also warmly welcome all the Forum
participants and hope that in the course of the next three days, we shall
have fruitful discussions and emerge with smart policies to expand global
financial inclusion. In this respect, I am delighted to be part of the Forum
and to champion its course.
Mr. Prime Minister, this Forum is jointly hosted by the Alliance for
Financial Inclusion (AFI) and the Central Bank of Kenya (CBK). The CBK is
a member of the AFI Steering Committee. The AFI has over 60 member
countries that account for the majority, nearly 70 percent, of the world’s
‘unbanked’ population. AFI’s vision is to expand financial services to at least
fifty million people across the globe living on less than two dollars a day by
2012.
The AFI currently concentrates on six policy areas, namely, Agent Banking,
Mobile Phone Banking, Diversification of Financial Service Channels and
Providers, State Bank Reforms, Financial Identity and Consumer
Protection. AFI’s mandate, however, will be widened as need arises. All
these thematic areas, which AFI champions are relevant to our country and

Remarks at during the 2009 Alliance for Financial Inclusion (AFI) Global Policy Forum – September 14, 2009
are key to our financial sector if it has to become “a vibrant and
globally competitive financial sector’’ as stipulated in Vision 2030. A
strong and accessible financial sector is a key ingredient in Kenya’s vision of
becoming a middle income country by the year 2030.
As a country we are matching on towards all these fronts that AFI espouses.
The government in the current fiscal year 2009/10 proposed to introduce
branchless banking. This will enable banks to provide their services through
Agents with wide distribution networks and therefore legalizing Agent
Banking and reducing costs of financial services. There has been a
significant reduction of the proportion of our population that remains
unbanked from 38% in 2006 to 33% in 2009 according to the national
financial access surveys conducted by the CBK and Financial Sector
Deepening (FSD) Kenya. This reduction in the unbanked is greatly
attributed to the contribution of mobile phones as a channel for money
transfer.
The recent Financial Access Survey also indicates that the proportion of our
population accessing banking services increased from 19% to 23% between
2006 and 2009. However, 33% of the population still has no access to any
form of financial service and 27% access financial services from the informal
financial sector. Despite the progress we have made towards expanding
financial access, the majority of Kenyans still lack access to formal financial
services. We are therefore keen to draw on the wealth of experiences that
are brought to the table by participants in this Forum. We will, over the next
three days, share experiences on smart financial inclusion policies that have
worked elsewhere. We will thereafter adopt these policies to suit our
respective countries as we work together to push forward the global
financial access frontiers.
Mr. Prime Minister, this Forum also comes at a time when the global
economy is suffering a slow down, with economic activities weakened

Remarks at during the 2009 Alliance for Financial Inclusion (AFI) Global Policy Forum – September 14, 2009
considerably. Although there are signs of improvement, we are yet to see
full recovery. Globally, policy actions taken to mitigate the crisis have been
geared towards maintaining effective and well functioning financial systems
and to reinforce their resilience in order to guard their integrity. We have
acted accordingly to ensure that our financial system remains sound,
secure, stable, accessible and trusted. We are in constant vigilance that this
remains the case and any action necessary to achieve this will be
undertaken.
With these few remarks, it is now my pleasant duty and honour to welcome
the Deputy Prime Minister and Minister for Finance to make a few remarks
and to welcome you to address this Forum.
Honourable Deputy Prime Minister and Minster for Finance, You
Have The Floor.