CENTRAL BANK OF KENYA
Remarks
by
PROF. NJUGUNA NDUNG’U
GOVERNOR
Sarova Stanley Hotel, Huxley Room
August 10, 2009

Remarks at the Launch of Southern Credit Banking Corporation Ltd International Mastercard Debit Card, August 10,

Chairman;
Managing Director of Southern Credit Banking Corporation;
Board Members;
Management and Staff;
Distinguished Guests;
Ladies and Gentlemen:
I am delighted to be here this morning to join hands with the family of
Southern Credit Banking Corporation Ltd in celebrating the launch of its
MasterCard Debit Card. Allow me at the onset to appreciate the presence of
the MasterCard Representative Assistant Vice President: Commerce
Development, Mr. Charlton Goredema. I also wish to salute the Board,
Management and Staff of Southern Credit Banking Corporation for successfully
serving Kenyans in the last twenty seven years.
I am pleased to note that your bank has expanded its network from the two
branches at incorporation in 1982 to nine branches countrywide and has been
in the forefront of innovations in electronic payments solutions in Kenya, a
position that it first achieved with their Senator Card brand. Today, the bank is
becoming a market leader with the launch of the first MasterCard Debit Card in
Kenya and also in the region. It is also one of the only three banks in Kenya
with the Acquirer status on the MasterCard franchise. The service will enable
the bank’s existing customers transact business at more outlets, at their
convenience, anywhere in the World. I commend the Board for this.
Ladies and Gentlemen; This new service will provide an expansion of
Kenya’s card market segment which is currently thin and requires patronising
by many of the bank customers. Similarly, the new product will go a long way
in deepening the financial sector by facilitating payments.

Remarks at the Launch of Southern Credit Banking Corporation Ltd International Mastercard Debit Card, August 10,

Mr. Chairman, Let me turn to growth of the banking sector and its
performance, one of the main pillars of Kenya’s economic growth.
Ladies and Gentlemen; Despite the local and global turbulences
experienced over the past one year, the banking sector remained stable and
exhibited resilience. The sector has continued to grow and expand both locally
and regionally to new markets within the East African region and beyond. In
addition, banks are posting good results for their second quarter ending June
2009. We commend the banking sector for the efforts in weathering storms of
the global financial crisis and our own share of internal shocks.
Mr. Chairman; Let me at this point mention some indicators of financial sector
performance for the quarter ended June 2009 to show not only its resilience
but its source of strength:-
• The Sector’s assets increased by 15% from Kshs.1.09 trillion in June 2008
to Kshs.1.26 trillion at the end of June 2009 as banks continued to expand
their lending portfolio.
• Deposits increased from Kshs.871bn in June 2008 to Kshs.954bn mainly
due to deposit mobilization and expansion of branch networks by banks.
• The Capital Adequacy Ratio stood at 19.8% above the statutory minimum
of 12%. This is an indicator that the sector has a cushion against periodic
shocks.
• The sector’s average liquidity at end of June 2009 was 40.9% well above
the statutory minimum of 20%.
• The number of people employed by the sector increased from 24,435 at the
end of June 2008 to 25,766 at the end of June 2009.
• The number of branches at the end of June 2009 stood at 930 an increase
of 158 branches from the corresponding period in 2008.

Remarks at the Launch of Southern Credit Banking Corporation Ltd International Mastercard Debit Card, August 10,

• The number of accounts has similarly increased to 6.7m accounts from
around 4 million accounts in the same period – shows we need to do more
on this count.
Ladies and Gentlemen, Our appeal to the banking sector is to put up
strategies that will support and stimulate the private sector. Banks stand to
benefit from a strong and vibrant private sector. The CBK has shown the
industry the way by the recent successive reduction of the Central Bank Rate
and Cash Reserve Ratio. It is good and encouraging for banks to post healthy
profits, but also good in tandem with that to reduce the lending rates to
encourage the private sector lending and financing both investments, working
capital and reducing the risks of default.
I would like to reiterate once more that the Central Bank welcomes initiatives
and innovations by the banking sector in coming up with new products and is
committed to the creation of an enabling regulatory environment towards this
end. I would therefore urge the banking sector to seek diversification of their
products in light of the dynamic banking environment to leverage on their
growth and earnings. Such diversification of financial services like the Debit
Card we are launching today do help to reduce transactions costs. But the
banks should let us know how we can help to reduce risks and costs if they are
the ones sustaining higher lending rates – but also keeping deposit rates low!
Ladies and Gentlemen; It is now my honour and pleasure to declare
Southern Credit Banking Corporation’s MasterCard Debit Card officially
launched into the Kenyan market.
Thank You