CENTRAL BANK OF KENYA
Remarks by
PROF. NJUGUNA NDUNG’U
GOVERNOR
AT THE
LAUNCH OF THE FAMILY BANK MOBILE PHONE BANKING
SERVICES
TTHHEE NNOORRFFOOLLKK HHOOTTEELL,, NNAAIIRROOBBII
Thursday, June 03, 2010

Mr. Titus K. Muya, Chairman of the Board of Directors, Family Bank
Ltd.;
Mr. Peter Kinyanjui, Chief Executive Officer, Family Bank Ltd.;
Board Members, Family Bank Ltd;
Distinguished Guests;
Ladies and Gentlemen:
I am privileged to be here this morning on the occasion of the launch of Family
Bank’s mobile phone banking services. Today marks yet another milestone on
Family Bank’s growth trajectory and also another important innovation in the
banking products that enlarge the range of financial services. I therefore feel
honoured to have been invited to launch this product.
It would not have been possible for us to assemble here and witness the rolling out
of this product into the market without the wise stewardship of the Board and
Management of the bank. I therefore salute the Board, management and staff of
Family Bank on the introduction of the mobile phone banking services that we
shall be launching this morning.
I have been informed that these mobile banking services dubbed “PESA PAP” have
been made possible through the use of the Safaricom M-Pesa Platform. On this
note, I salute Safaricom for having partnered with several banks in providing
innovations that will not only enhance access to financial services but also the
growth of commerce in both the rural and urban markets. In his Madaraka
Speech to the Nation, H.E. the President, Hon. Mwai Kibaki particularly singled
out the innovation in Information Technology and the support it has provided to
mobile phone money transfer services – as leading innovations in the world. The
World Bank’s Doing Business Report on Access to Credit places Kenya at 4th
position of 183 countries.
Allow me to mention that the PESA PAP product being rolled out today is a
consolidation of three products with key distinct features as follows:-

• The M-Pesa Super-Agency providing electronic value to Safaricom Agents
countrywide will be of benefit in terms of improving M-Pesa availability in the
market and ensuring M-Pesa Agents maintain optimum levels of float.
• Bulk Value Payments through M-Pesa will allow bulk remittance of
payments including salaries and loan disbursements to employees, borrowers
and agricultural farmers and the;
• M-Pesa Paybill for the acceptance of deposits will enable the transfer
of electronic value from Safaricom’s M-Pesa money transfer platform to a
customer’s bank account.
The benefits of the PESA PAP products just like other mobile products already
existing in the industry cannot be gainsaid. This product is a technological
solution that will provide the following key benefits:-
• Build up of savings: With the transfer of electronic value from Safaricom’s
M-Pesa money transfer platform to a customer’s bank account, a synergetic
relationship is created in terms of deposit mobilization for the bank while the
customers benefit in building up their savings for future investment.
• Convenience: Access to financial services on the mobile phone will certainly
lower the cost of transfer of remittances, improving the safety and security of
cash and make payments more convenient.
• Serving the unbanked and the under-banked: With 32 percent of
Kenya’s bankable population being excluded from formal and informal
financial services as indicated by the National Financial Access Survey in 2009,
mobile phone banking services will reduce the cost of running banking
operations in order to enhance access to affordable, flexible and faster services
to customers and by and large the ‘unbanked’ population in Kenya. Part of this
exclusion has been due to costs and physical distance. These twin problems
have been solved by PESA PAP products.
• Supporting Vision 2030: The rolling out of such innovative products will
bring about immense contribution in deepening the financial sector. It is

through financial deepening that a majority of the Kenyan population will
access financial services easily and affordably. This will increase savings and
build up of assets through affordable credit, and through increased savings and
investment we will walk the path determined by Vision 2030.
Ladies and Gentlemen: I am delighted and encouraged by the way the banking
sector is embracing technology and demystifying the mobile and internet banking
services from the perception that it is suited for the rich and well-educated but
that the poor and the marginalized can as well be brought on board. Markets are
developed by increased participation. Increased participation reduces unit costs.
That is why cost of credit, via base lending rates are declining.
As I conclude my remarks, let me reiterate that the Central Bank appreciates the
initiatives and innovations by the banking sector in coming up with new products
targeted at niche consumers and is committed to the creation of an enabling
regulatory environment. We shall, on a continuous basis, revise relevant
regulations that will ensure that the dynamic banking environment is adequately
served as we gather more knowledge through innovations and market demands.
Ladies and Gentlemen: It is now my honour and privilege to launch the
Family Bank “PESA PAP”, I am sure the market is anxious for uptake
of this product.
Thank You