CENTRAL BANK OF KENYA
Remarks by
PROF. NJUGUNA NDUNG’U
GOVERNOR
NATIONAL DIGITAL REGISTRY SERVICE
FINANCIAL SERVICES SECTOR CONSULTATION
Serena Hotel
Thursday, October 23, 2014

Ms. Mwende Gatabaki, Director General, Kenya Citizens and Foreign
Nationals Management Service;
Mr. Joshua Oigara, Chairman, Kenya Bankers Association;
Mr. Habil Olaka, Chief Executive Officer, Kenya Bankers Association;
Distinguished Ladies and Gentlemen;
I am delighted to be here today at this important consultative meeting on the
National Digital Registry Service to the financial services sector. I am grateful for
the invitation and at the outset let me register the Central Bank of Kenya’s support
for this important initiative.
Ladies and Gentlemen: The national digital registry has three core objectives:-
Strengtheneing national security, reducing crime and improving safety.
Driving efficiency, effectiveness and accountability in service delivery.
Providing citizen centric services that are easy to access, available and
affordable.
More fundamentally, the register will capture details of people, land , assets and
establishments. These are important objectives but of fundamental improtance to
the financial sector is the provision of a digital identity for individuals and
corporate entities. Identity is a prequisite for the stable, efficient, safe and inclusive
financial sector that is envisaged pursuant to Vision 2030. It is the process of
identification and a host of menu services that can be included that makes an
assurance of safety and accessibility of financial services.
Without identity, individuals and corporate entities cannot access the financial
sector. In Kenya, the use of the identification card has mitigated this challenge.
However evolution in the financial sector and growth in fraud has possed serious
challenges in the form of fraud perperated through identity theft. We need such a
registry service as the repository insitution for any verification and cross-checking.
Ladies and Gentlemen: Most businnesses in Kenya thrive in the informal
market and lack the formal identity that is required to in particular access credit.
These are mainly the small and medium size enterprises that drive Kenya’s
economic growth. These businesses lack the formal identity or track record that is
required to access credit. For these businesses to grow to the next level, it is
imperative that they aquire a formal identity and a documented track record. Only
then, will they be able to access credit and grow their business. But how do we
make it easier for them to register formally? I leave this to this Registry Service.

The Central Bank has in this regard been supportive of the Integrated Population
Registry Service (IPRS). The IPRS has been a useful tool for financial institutions
to validate the identity of their customers. We have asked all banks to utilise the
IPRS in their Know Your Customer checks and mitigate fraud risk. The National
Digital Registry will build on the IPRS and provide an even more powerful tool for
the Financial Sector and especially for SMEs.
The Central Bank therefore stands ready to support this important initiative and
work with the financial sector to utilise it. Through the register, financial
institutions will be able to meet the statutory legal and regulatory requirements for
Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT)
and the common frauds in banks that we see every day. AML/CFT has become an
issue of global concern and mitigating measures are important to ensure the
integrity of Kenya’s financial sector.
Ladies and Gentlemen: Of importance also is the ease of access to credit. A
central repository of personal and corporate information will facilitate banks in
their credit risk appraisal. This should not only ease access to credit but also
reduce the cost of credit given the lower search costs. Finally the register will also
reduce the risk of fraud particularly identity theft and reduce the operational cost
of fraud to the financial sector. These are but a few of the benefits of the national
digital registry that I can enumerate and also stress that personal and corporate
information and identification in the National Digital Registry Service is a major
milestone in completing the financial infrastructure requirements in our country. I
am sure that this will be a useful consultation forum and you can count on the
Central Banks’ support and together we develop a stable and vibrant financial
sector.
Thank You.