CENTRAL BANK OF KENYA
Speech by
PROF. NJUGUNA NDUNG’U
GOVERNOR
LLIICCEENNCCEEDD DDEEPPOOSSIITT--TTAAKKIINNGG MMIICCRROOFFIINNAANNCCEE IINNSSTTIITTUUTTIIOONN IINN
Hotel Intercontinental, Nairobi
16th June, 2009

Governor’s Speech at the Breakfast Launch of Faulu Kenya as A DTM, June 16, 2009
The Deputy Prime Minister and Minister for Finance, Hon Uhuru
Kenyatta;
The Chairman, Faulu Kenya;
The Board of Directors, Management, and Staff of Faulu Kenya DTM;
Microfinance Industry Practitioners;
Distinguished Guests;
Ladies and Gentlemen;
It is a great honour to be with you today to celebrate the achievement of Faulu
Kenya Deposit Taking Microfinance Limited as the first nationwide Deposit Taking
Microfinance institution in Kenya to be licensed by Central Bank under the
Microfinance Act, which came into effect on 2nd May 2008.
Before I make any remarks, let me take this opportunity to congratulate and thank
Faulu Kenya DTM for the patience and collaboration they accorded my staff
during the licensing process and for having satisfactorily fulfilled all the licensing
requirements. Let me also thank the Bank Supervision Department staff for their
diligence and hard work towards the review and finalization of Faulu Kenya
DTM’s application, the first, by all means. This marks a beginning for the
Microfinance Industry in deposit-taking which we believe will enhance access to
financial services and cultivate a culture of saving. It will also give Faulu Kenya
DTM an opportunity to provide to its clientele, more diverse financial solutions
including deposit, lending facilities and money transfers.
Ladies and Gentlemen: It is important to note that the Central Bank has, to
date, approved 26 business names, received 9 formal applications, which are at
various stages of review and has now licensed one institution. We hope to license
all nine applicants before the end of the year depending on their efforts and
turnaround in fulfilling all the licensing requirements. This day provides an
opportune moment to review the progress made towards the implementation of
the Microfinance Act and specifically, provides the occasion to celebrate the

Governor’s Speech at the Breakfast Launch of Faulu Kenya as A DTM, June 16, 2009
licensing of Faulu Kenya DTM limited. As you are aware, this is a major milestone
towards the development of an all inclusive financial landscape in Kenya and
particularly, the Microfinance Industry.
Over the last few years, Kenya’s financial landscape has evolved quite
considerably. This is evidenced by the ongoing review of the Banking Act,
implementation of the Microfinance Act and enactment of the Sacco Societies Act
to accommodate the fast changing market dynamics and best practices. These
developments will create an enabling environment for these institutions to offer a
wide range of financial services and products using a variety of innovative delivery
channels to different segments of the population, in particular, the use of
Information and Communication Technology (ICT) and ICT enabled services.
Ladies and Gentlemen: As you may be aware, we launched the FinAccess
2009 Survey results on Wednesday 10th June 2009. The findings of the survey
revealed an increase of 22.6% in the number of adults that access formal financial
services through banks and Postbank in 2009 compared to 18.9% in 2006, an
increase of 3.7%. On the other hand, there was a notable increase of 17.9% of
Kenyans that were served by Microfinance Institutions and Sacco Societies in
2009 compared to 7.5% in 2006, while the proportion of those that depended
primarily on informal financial service providers such as Accumulating and
Rotating Savings and Credit Associations, shopkeepers and money lenders
declined from 35.2% in 2006 to 26.8% in 2009. These survey results also
revealed that there was a marked increase of 67.3% in the proportion of Kenyans
that accessed financial services and products using formal, semi-formal and
informal financial service providers in 2009 compared to 61.6% in 2006. The
results also indicated that the proportion of Kenyans that were excluded from
these services reduced from 38.4% in 2006 to 32.7% in 2009. We expect this
trend of expanding the access frontier to continue with the licensing of DepositTaking Microfinance institutions and implementation of the Sacco Societies Act as
well as the introduction of Branchless Banking.

Governor’s Speech at the Breakfast Launch of Faulu Kenya as A DTM, June 16, 2009
Ladies and Gentlemen: We would like to once again congratulate Faulu Kenya
DTM for successfully qualifying to be licensed as a Deposit Taking Microfinance
Institution. This pioneering role you have taken must shine, that is why we are
here today. On its part, the Central Bank would like to assure the industry and all
stakeholders of its continued support in the development of the Microfinance
Industry.
With these few remarks, Ladies and Gentlemen, it is now my singular pleasure
to invite the Deputy Prime Minister and Minister for Finance, Hon. Uhuru
Kenyatta to give his Keynote Address on this special occasion of the official launch
of Faulu Kenya DTM as a Deposit-Taking Microfinance Institution.
THANK YOU