CENTRAL BANK OF KENYA
Remarks by
PROF. NJUGUNA NDUNG’U
GOVERNOR
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Sankara Hotel, Westlands
6th September, 20o1

Hon. Simeon Nyachae, Chairman, Credit Bank Ltd;
Mr. Nyangiri Nok Bwonditi, the Chief Executive Officer;
Board Members here present;
Management and staff;
Distinguished Guests;
Ladies and Gentlemen:
I am delighted to have been invited to this auspicious occasion of the launch
of Credit Bank’s New Brand Identity. May I at this early juncture commend
the Board, Management and staff of Credit Bank for their role in steering
this institution in terms of growth, safety and soundness since it was
incorporated in 1986.
May I also specifically thank the Chairman for his vision of taking the early
lead in repositioning the bank to take advantage of the anticipated socioeconomic changes following the re-birth of our Nation on August 27, 2010.
Our new constitution is a radical document that calls for a shift in thinking
and formulation of business strategies. But more importantly, it gives us
confidence and power to rebuild our institutions especially regulatory
institutions that will support the development of strong banks. The role of
the regulator in a country like ours is also to develop the market.
In the new dispensation, resources will be transferred to the rural areas and
market players need to take advantage of the enormous business
opportunities that will arise so as to grow their businesses and also take
services closer to the people. Mr. Chairman, your decision to re-brand could
not have come at a better time as this will not only enhance delivery of
banking services to your customers but also contribute towards the overall
growth of the bank.
I am informed that your newly opened branch at Westlands is the 5th branch
of Credit Bank after the ones located at Koinange Street, Nakuru, Kisumu

and Kisii. Although the brick and mortar model has served our country well
over the years, the clamour for cost reduction, ease of doing business and
coverage of wide geographical spreads of potential customers, that is the
clamour for financial inclusion, has led to the introduction of cheaper
alternative delivery channels for banking services such as Agent Banking
and Mobile Banking.
On agent banking, the Central Bank has already granted approvals to two
institutions to roll out agent networks. Specific approval has so far been
granted for a total of 4,392 agents. In addition, applications from other
institutions to roll out agent networks are being processed. I therefore urge
banks to consider utilising these alternative channels in order to reap the
benefits of increased customer base and reduced cost of banking services.
Ladies and Gentlemen, the banking industry has become very
competitive in the recent past and you have to keep abreast of the various
innovative trends in the market in order to compete effectively within your
market niche. The stiff competition has brought about new innovative
products in the market, flexible banking hours and a wider reach in terms of
delivery of banking services. But above all, price competitive services. The
Central Bank has played its supportive role in all these developments and
wishes to commend the industry for ensuring that risks associated with
these new products and services are adequately managed and mitigated.
This has been supported by creating new institutions; the Credit Reference
Bureaus and new initiatives; Agent Banking Model. These aspects will
continue so that we can create a dynamic market capable of pricing its
products competitively.
The roll out of the Credit Information Sharing mechanism for the banking
sector became effective on 31st July 2010. The first submissions were due to
Credit Reference Bureau Africa by 10th August 2010. I am pleased to report

that over 450,000 records were submitted to the Bureau by institutions
licensed under the Banking Act. 78 percent of the records were accepted as
submitted to the Bureau while the other 22 percent required revision. This
is a reflection of the considerable groundwork done by Central Bank of
Kenya (CBK) and the Kenya Bankers Association (KBA) in preparation for
the roll-out. CBK, KBA and CRB-Africa have since the roll-out date,
continued to engage banks that experienced challenges during the initial
transmission. In this regard, sensitization workshops were conducted in
mid-August 2010 targeting representatives of bank branches across the
country.
The Central Bank is committed to the development of a robust credit
information system in Kenya. This will facilitate the building of information
capital that will help reduce information asymmetry between banks and
their borrowers. CBK will also rigorously enforce the CRB rules and
regulations to ensure the ity, integrity and accuracy of
information held by the bureaus and above all, encourage the use of this
information to support decision making in financial transactions.
The Central Bank and the Government will continue to play their role in
ensuring that an enabling environment conducive for appropriate and
vibrant economic activity and growth is in place. However many institutions
have not responded positively to the various initiatives put in place that are
geared towards the lowering of lending rates and other banking costs. It is
expected that the current trend of utilizing technology in delivery of banking
services will bring about significant cost savings that will in turn translate to
lower costs to consumers. However this expectation remains largely
unrealized. May I at this point commend the management of Credit Bank
for reducing the bank’s base lending rate from 16.0 percent to 14.75 percent
in July 2010. There is still room to do more as you re-brand and introduce
new products dictated by your market niche.

Finally, let me once again reiterate that the Central Bank of Kenya will
continue to pursue monetary and financial policies, and play the
supervisory role that create a conducive environment for growth of the
financial sector, encourage provision of banking services to the majority of
the population at affordable cost and enhance the safety and soundness of
the financial system. It is Kenyans’ faith in the financial system that will
facilitate its growth, depth and development.
With these few remarks, Mr. Chairman, Ladies and Gentlemen, it is now my
honour and pleasure to declare the New Brand Identity of Credit Bank
officially launched.
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Thank You and God bless you a