CENTRAL BANK OF KENYA
Remarks by
PROF. NJUGUNA NDUNG’U
GOVERNOR
Serena Hotel, Nairobi
November 5, 2014

Mr. Bob Collymore – CEO Safaricom;
Ms. Pam Patsley CEO – Moneygram International;
Mr. Herve Chomel – Vice President Moneygram Africa;
H.E. Robert Godec – US Ambassador to Kenya;
Dignitaries;
Distinguished Guests;
Ladies and Gentlemen:
I am pleased to join you today on this auspicious launch of
Safaricom MPesa and MoneyGram International Money Transfer
Partnership. It is a great honour to be here with you this
morning. I thank the CEO and Management of Safaricom for
inviting me to this occasion.
Ladies and Gentlemen: I recall with pleasure back in 2009 when
I witnessed the first partnership in international money
remittance between Safaricom and Western Union. This created a
much needed avenue for the safety of remittances and efficiency
through easily accessible channels. And today, we are gathered
here to celebrate another milestone in the deepening of Kenya’s
financial sector. The partnership between Safaricom and
MoneyGram International is not only an opportunity for
Safaricom to satisfy the needs of its customers but also to
contribute in enhancing the quality of financial inclusion. I
commend the Board, Management and Staff of Safaricom and

MoneyGram International for their decision to operationalise this
partnership. This partnership will benefit both parties through
expansion of network of outlets. As I continually to encourage
and advocate, it is such partnerships that discover market
opportunities and allow further competition to enlarge the space.
As everyone attending this launch is aware, Kenyans have spread
their reach worldwide in both business and in practising their
professions. Kenya being a small open economy, it has liberalised
its markets to promote and enhance growth. These professional
and business people within and outside Kenya send substantial
shares of their earnings to family members back home perhaps
for consumption smoothing and investment.
Ladies and Gentlemen, the mobile phone financial services sector
in Kenya has experienced phenomenal growth since its inception
in 2007. This sector is served by over 120,000 agents handling
more than 2.5 million transactions daily valued at Ksh.6.3
billion. This partnership will expand opportunities for business
and increase the global outreach to more than 90 countries and
interlink more than 20 million customers in those countries
already served by MoneyGram International. Innovations and
partnerships in the mobile phone money transfer industry, as we
are seeing today, have given impetus to access to financial
services to Kenyans. Besides the revolutionary impact on
financial systems, mobile phone technology has also provided

access to services for the previously unbanked and created
thousands of job opportunities. The provision of remittance
services is a potentially effective method by which service
providers can attract the unbanked for sending or receiving
purposes. In this regard, it is an emerging market leadership
platform to be consolidated for enhanced financial inclusion.
Distinguished Guests: There has been tremendous growth in
international remittances in recent years, a trend that is expected
to continue as the World becomes increasingly interlinked. The
World Bank estimated remittance flows to developing countries in
2013 to have amounted to USD414 billion, and projections to
USD540 billion by 2016.
In Kenya, the annual remittance inflows from Kenyans in the
Diaspora, officially recorded from banks’ returns, rose from USD338
million in 2004 to USD1.3 billion in 2013. This is a commendable
growth of more than 285%. These remittances, that are playing a
vital role in supporting both consumption and investment needs of
the recipients, have also become an important source of foreign
exchange inflows to the country.
Ladies and Gentlemen, the Kenya Government recognizes the role
and importance of remittances in boosting economic development. In
this regard, CBK has worked closely with stakeholders in the mobile
phone money transfer industry in implementing regulatory reforms
aimed at guiding the market to prosperity. The National Payment
System Regulations 2014 were formulated and gazetted to guide

mobile phone money transfers within the country while the Money
Remittance Regulations 2013 have been operationalized to
introduce stand-alone money remittance providers in Kenya.
Previously all international remittances were made through
commercial banks platforms.
Ladies and Gentlemen: Despite the significant progress made in
making remittance services accessible and efficient in Kenya, as
in the rest of the developing world, there are still some challenges
that we need to address. Chief among these are the high
transaction costs, integrity of the services and need for effective
competition. The practice has been to charge a fee for transfer
and fix the exchange rate for the amount to be received. However,
the question remains “How do we provide services for
international money remittances at competitive costs?” To address
this, CBK has approved partnerships between local financial
institutions and international money transfer operators, the latest
being between Safaricom Mpesa and MoneyGram International
Money Transfer.
Ladies and Gentlemen, I have alluded to how sending and
receiving of remittances is an important type of financial
transaction to the country, for many people and their families.
This fact engenders both a challenge and an opportunity. The
challenge for us as regulators is to ensure that remitters can send
funds to their recipients conveniently, safely, and at a reasonable
cost. The opportunity, primarily for mobile phone money transfer
service providers and other mainstream financial institutions, is

to find ways to leverage users’ need for remittance services into a
broader relationship, one that will be both profitable for the
service provider and will also provide remitters and their
families greater financial access. This will increase the
participants in the money remittance market considering costs
are a major barrier to entry in any market.
Lastly, Ladies and Gentlemen, as we enjoy the benefits of
expanding money remittance business, let us comply with the
Anti-Money Laundering and Combating the Financing of
Terrorism requirements. I am sure that these transactions are easy
to monitor on both ends. But the benefit is to discourage those
who use the wallet or hand luggage to remit – since we cannot
effectively monitor such. This will facilitate lowering of the
country risk that we should take advantage of in reducing costs of
money transfers.
With these few remarks, Ladies and Gentlemen, it is now my
distinct honour and pleasure to declare the Safaricom and
Moneygram Money Transfer Partnership officially launched.
THANK YOU