CENTRAL BANK OF KENYA
Speech by
PROF. NJUGUNA NDUNG’U
GOVERNOR
LAUNCH OF THE KENYA@50 GOLD COMMEMORATIVE COIN
Kenyatta International Conference Centre, Nairobi
Monday, December 9, 2013

His Excellency Uhuru Kenyatta, President and Commander in
Chief of the Defence Forces of the Republic of Kenya;
His Excellency William Ruto, Deputy President of the Republic
of Kenya;
Dr. Hassan Wario, Cabinet Secretary, Sports, Culture and Arts;
Mr. Henry Rotich, Cabinet Secretary, The National Treasury;
Cabinet Secretaries and
Principal Secretaries;
Distinguished Ladies and Gentlemen:
I wish at the outset to thank His Excellency the President for
being with us this morning. The Central Bank of Kenya (CBK) is
truly honoured and privileged to host His Excellency on this
occasion of the launch of the Kenya@50 Gold Commemorative
Coin. We are also grateful to you and the Kenya@50 Steering
Committee for incorporating this launch in the calendar of
events for the Kenya@50 celebrations.
Your Excellency, the commemorative coin you will be launching
today is the contribution of the Central Bank to Kenya’s
landmark golden jubilee. The Bank has on various occasions in
our country’s history issued commemorative coins with some
marking Kenya’s 10th, 25th. and 40th independence celebrations.
We therefore found it befitting to issue a Kenya@50 Gold

Commemorative Coin. The issuance of this coin will be a onetime limited edition just for Kenya’s 50th birthday and will not
be available for circulation.
Your Excellency
Since the Central Bank’s establishment in 1966, it has walked
with Kenya through the years. The Bank was set up with the core
mandate of fostering price stability. This mandate has been
achieved inspite of challenges that we have faced over the years
such as the 1973 oil crisis, 1977 coffee boom and more recently
the global financial and currency crisis of 2008 to 2011. We
have continued to sharpen our monetary policy instruments and
operational framework to deal with the ever emerging challenges
and dynamics.
The Central Bank’s core mandate has evolved from monetary
policy formulation to fostering stability and solvency of the
banking industry in Kenya. A recent core mandate of the
Central Bank was added in 2003 to empower the Bank to oversee
an effective and efficient payments and settlement system.
Your Excellency
The CBK is proud to be associated with Kenya@50 celebrations
and can parade the following milestones as its contribution to
Kenyans. The Bank has supported financial inclusion initiatives

to enhance access to financial services for the vast majority of
Kenyans. These initiatives have been fairly successful leading to
67% of the Kenyan adult population having access to formal
financial services. The level of exclusion from financial services
has on the other hand declined from 39% in 2006 to 25% in
2013.
This success has been achieved through a number of specific
initiatives that I will briefly highlight.
First, the advent of mobile financial services in 2007
revolutionized access to financial services in Kenya overcoming
cost and distance constraints. Kenyans have rapidly adopted
mobile financial services making Kenya a global leader. On
average, transactions worth over Ksh.5 billion are transacted
daily on mobile phone banking platforms. The Central Bank
continues to work with other public and private sector players
to ensure the growth of mobile financial services while
ensuring security and reliability of the services.
Your Excellency
Second, for many years, Kenya’s rural and peri-urban areas
were not well served by the commercial banking sector. The
Microfinance Act was therefore enacted in 2006 empowering
the Central Bank to regulate and supervise Deposit Taking

Microfinance Institutions. These institutions are intended to
serve the rural and peri-urban niche and particularly small
and medium size enterprises. To date, the CBK has licensed 9
Deposit Taking Microfinance Institutions which have
mobilised over Ksh.22 billion in deposits and lent out over
Ksh.25 billion.
Third, Your Excellency, for many years, access to credit
particularly for small and medium enterprises has been
hindered by the lack of physical collateral to secure loans. The
CBK therefore partnered with the government and the banking
sector to roll out the credit information sharing mechanism in
2010. This mechanism enables banks to share credit
information on borrowers to facilitate credit risk appraisal
and pricing. Borrowers are therefore able to develop
information capital which they can use to secure loans
without having to offer physical collateral to the banks. We
have so far licensed two credit reference bureaus, while banks
have accessed over three million reports from the bureaus since
2010. We are currently working with the National Treasury
and market players to extend the mechanism beyond banks to
other credit providers.
Your Excellency
Fourth, one of the challenges that Kenyans have faced over the
years was the long distances they have had to cover to access

banking services. Bank branches were predominantly found in
urban areas with rural areas being sparsely covered. To
address this constraint, the agency banking model was rolled
out during His Excellency’s tenure as the Minister for Finance.
This model has enabled Kenyans deep in the rural areas to
access banking services from their village shops. There are
currently over 23,000 bank agents spread across Kenya who
have transacted over 69 million transactions valued at over
Ksh.367 billion since 2010.
The agency banking model has supported the expansion of
Kenya’s banking sector to over 21 million deposit accounts. We
also note with pride that the Kenyan agency banking model
has been replicated in the East African Community notably in
Rwanda and Tanzania.
Your Excellency
Finally, the Central Bank has also focused on reducing the cost
of doing business. Kenya remains a cash dominant economy
which has led to banks facing high costs in transporting cash
across the country. To address this challenge, the Central Bank
has rolled out currency centres in partnership with the
banking sector outside Kenya’s major cities and towns. These
centres have considerably reduced the cost of cash-in–transit
for banks.

In addition, to reduce the cost of doing business, CBK has worked
with the banking industry to reduce the clearing period for
cheques. This has been through the introduction of cheque
truncation which entails a transformation from manual to
electronic clearance of cheques. For many years, cheques were
physically moved from across the country to Nairobi for clearing.
Today, cheque images are electronically moved to facilitate
cheque clearance. This initiative has seen the cheque clearance
period dramatically reduced from as long as 21 days for
upcountry cheques to the T+1 clearing period that we rolled out
this year.
Your Excellency
The Central Bank is honoured to be associated with these
initiatives aimed at taking financial services closer to Kenyans.
We will redouble our efforts partnering with the Government and
market players to ensure that the vast majority of Kenyans have
access to affordable, secure and efficient financial services.
In conclusion, ladies and gentlemen, let me once again thank His
Excellency and all our invited guests for honouring us with your
presence.
Thank You