CENTRAL BANK OF KENYA
KEYNOTE ADDRESS
BY
PROF. NJUGUNA NDUNG’U
GOVERNOR
‘‘BBeeiinngg aa DDrriivveerr ooff CChhaannggee ttoo IInnvveesstt DDiiffffeerreennttllyy IInn WWoommeenn’’
Restaurant les Quatre Coins du Monde, Abidjan, Cote d’Ivoire
25th May 2010

Dr. Donald Kaberuka, President, African Development Bank;
Madame Graça Machel, Founder, New Faces New Voices Network;
Distinguished Guests;
Ladies and Gentlemen:
It is indeed an honour and privilege for me to address this gathering tonight following
the fruitful discussions during the African Women’s Economic Summit held in March
2010 in Nairobi, Kenya. I would like to take this opportunity to thank the African
Development Bank and the New Faces New Voices Network for organizing tonight’s
dinner. This event provides a platform to raise awareness about commitments made
at the Summit and the need to invest differently in women. It also offers us the
opportunity to review the various pledges made at the summit and to recommend
concrete actions for the way forward.
Ladies and Gentlemen, women form a big proportion of the population and
command a sizeable role in our societies’ socio-economic activities and are therefore
important economic and social change agents. In Africa, women constitute more than
half of the population and form the majority of our labor force, especially in
agricultural activities and household welfare, which remain the backbone of our
economies. A large number of them also run micro, small and medium enterprises
(MSMEs) that constitute a significant share of economic activity in our economies. It
cannot be doubted, therefore, that women play a critical role in the process of
economic development in the African Continent. Despite this, women have remained
largely marginalized in terms of access to, and control of resources that are crucial in
wealth creation, welfare and the development process.
An example from my own country, Kenya, in terms of access to finance illustrates this
clearly. Although two national financial access surveys conducted in 2006 and 2009
have shown general improvements in financial access with access to formal finance
improving from 19 to 23 percent; semi-formal improving from 8 to 18 percent;
informal declining from 35 to 27 percent; and the excluded falling from 38 to 33
percent; access to finance has remained worse for women with 66 percent of women

not accessing formal financial services and 33 percent being excluded altogether from
any form of financial services. You will agree with me that without financial access,
the poor cannot save or build their assets – we will, therefore, have no hope of
eradicating poverty from the Continent.
Ladies and Gentlemen: The Government of Kenya has played a pivotal role in the
promotion of women empowerment and gender equality. The Women Enterprise
Fund, a flagship project created by the Government of Kenya in 2007, has been
mandated to economically empower women by providing them access to affordable
credit. Through the Fund, subsidized credit for business start-ups or expansion is
provided and so are business training, market linkages and other infrastructure
support to women-run businesses.
Through the revolving Fund, women have been able to access loans and venture into
a variety of productive economic activities and employment, which have triggered
positive multiplier effects. These businesses have created jobs for the women
themselves as well as thousands of other Kenyans. Increases in their disposable
incomes have translated into better nutrition for their families, better clothing,
healthcare, food security and education. The Fund is also strengthening women
voices and their decision-making, bargaining power in the household as well as within
the community and the nation. The Women Enterprise Fund’s motto that ‘if you
empower a woman, you have empowered a family and a whole nation’,
captures it all.
Ladies and Gentlemen: Given this scenario of access to finance for women, the
timing of the African Women Economic Summit was very timely. At the Summit, we
sought to explore the barriers to mainstreaming women in accessing finance and
decision-making in the financial sector. More importantly, we sought to identify
pragmatic approaches to breaking these barriers. At the end of the Summit, various
pledges were made by financial institutions, development finance institutions, network
organisations and regulators. As regulators, we committed to identifying and
addressing barriers to women accessing finance in the legal and regulatory
framework. We would then identify innovative ways of mitigating these barriers.

I therefore wish tonight to outline the progress made by the Central Bank of Kenya
(CBK) in enhancing access to finance by women since the Summit. The first landmark
was on 31st March 2010 - barely two weeks after the Summit - when CBK licensed the
second deposit-taking nationwide microfinance institution, Kenya Women Finance
Trust Deposit Taking Microfinance Limited (KWFT). With a customer base of close to
400,000 female clients, it is safe to say that Kenya Women Finance Trust Deposit
Taking Microfinance Institution is women-centric. Thus the transformation to a
deposit-taking microfinance institution will enable KWFT to offer a wider range of
appropriate products and services targeting low-income women entrepreneurs.
Ladies and Gentlemen: At the beginning of this month, the Central Bank further
bridged the financial exclusion gap through the operationalization of Agent Banking
Guidelines. The guidelines allow banks to extend their outreach to approximately 78
percent of the Kenyan population, majority of who are women residing in the rural
areas. This will be through the use of third party agents such as retail outlets,
Microfinance Institutions and Savings and Credit Cooperative Societies by banks. The
Agent Banking model will enable banks extend their outreach cost effectively
particularly in the rural areas. In these areas, significant transaction costs and time are
incurred in accessing the nearest bank branches.
Ladies and Gentlemen: The Central Bank of Kenya together with sister Central
Banks of the East African Community (EAC): Uganda, Tanzania, Rwanda and
Burundi, on May 10th 2010, committed to conducting diagnostic surveys to clearly
identify the demand and supply constraints in accessing financial services. This
commitment was made during the 13th Governors’ Meeting of the Monetary Affairs
Committee (MAC) of the EAC. MAC is tasked with the creation of a Monetary Union
for the EAC. These diagnostic studies will play a key role in providing an empirical
analysis of the constraints that women face in accessing financial services. The surveys
are then expected to inform the formulation of targeted policies to address the
identified constraints.

Ladies and Gentlemen: Last week, in an affirmative move to expanding access to
finance, Equity Bank, a leading Kenyan bank partnered with Safaricom, a leading
Kenyan telecom operator, to provide an integrated banking and telecommunication
financial services product. This product known as M-Kesho is accessible through a
mobile phone alongside the internationally celebrated money transfer service, MPesa. M-Kesho will offer a low cost savings, micro-credit and micro-insurance product.
Customers will be able to transfer amounts as little as Ksh.100 (USD 1.5) from their
M-Pesa account to an Equity Bank interest earning account at no cost. Customers will
also be able to complete the account opening documentation not just at Equity Bank
branches but also at M-Pesa Agents spread throughout Kenya.
Innovative technological products such as M-Kesho will ultimately extend the
distribution of financial services to the unbanked population who are not reached by
traditional banking networks while reducing the distances travelled, the transactions
cost, and improved security for both the banks and clients. At present, the Central
Bank has approved 500 M-Pesa agents, which is half the total number of commercial
bank branches to serve as account origination points for the product. We expect to
approve over 5,000 agents by the end of July 2010. M-Kesho goes beyond urbanrural money transfer. It attracts recipients to save the funds received for
intermediation. This in turn enhances a culture of saving which will promote growth
and wealth creation.
Finally, the Central Bank of Kenya and the Association of Microfinance Institutions
(AMFI) are looking for ways to hasten the speed of rolling out microfinance
institutions. The MFIs are an important vehicle for reaching out to the rural economy
where most women in Kenya are found. One bottleneck has been the branch
network requirements and the investments required. The Central Bank is studying
ways of overcoming these bottlenecks.
Ladies and Gentlemen: As I draw to a close, I urge fellow regulators and
policymakers to seek to understand the barriers to accessing finance by women. It is
only by understanding these barriers that effective policies can be formulated to
extend financial inclusion frontiers for women. Financial institutions including banks,

Microfinance Institutions and Savings and Credit Cooperative Societies also have a
critical role to play. With a critical mass of women entrepreneurs, they will find a
ready market form the women fraternity.
Ladies and Gentlemen: As a driver of change, I would like to reiterate the
commitment of the Central Bank of Kenya, as declared during the African Women’s
Economic Summit, to improving financial access to women and enhance their
opportunities to become key actors towards change and, ultimately, the development
of our economies. I look forward to fruitful deliberations tonight and wish you a
pleasant stay in Abidjan.
Thank You