CENTRAL BANK OF KENYA
Keynote Speech by
PROF. NJUGUNA NDUNG’U, CBS
GOVERNOR
CENTRAL BANK OF KENYA
during the
LAUNCH OF THE FINACCESS GIS MAPPING OF ALL
FINANCIAL ACCESS TOUCH POINTS, 2014
Hilton Hotel, Nairobi
13th March, 2014
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The Chief Executive Officers of Domestic Financial Sector
Regulators;
The Chief Executive Officers and Officials of Financial Services
Providers;
The Principal Secretary – Ministry of Information,
Communication and Technology
Deputy Governor – Dr. Haron Sirima
Representatives of Development Partners;
Distinguished Participants;
It is my honour and pleasure to join you this morning to formally launch the
results of our GIS Spatial Mapping of all Financial Access Touch Points in
Kenya under the auspices of the Financial Access Partnership (FAP) with
Bill and Melinda Gates Foundation. This GIS Spatial Mapping of Financial
Access Touch Points was supposed to provide insights in understanding the
financial inclusion landscape and our quest to expand financial inclusion.
As you will recall during the launch of the Third National FinAccess 2013
Survey Report of top line findings on 31st October 2013, I extended to you
the invitation towards the launch we are witnessing today. I am delighted
that we have kept our word.
Ladies and Gentlemen: Before making any further remarks, allow me to
thank the Bill and Melinda Gates Foundation and all our collaborating
partners under the Financial Access Partnership (FAP) for their tremendous
contribution towards the success of this Project. At this point, I cannot
forget to thank Brand Fusion Marketing International Ltd. for conducting
the field work successfully despite the numerous challenges they faced and
the FinAccess Management (FAM) comprising the Central Bank of Kenya
(CBK), Research and Policy Analysis Department and the Financial Sector
Deepening (FSD) Kenya for ensuring the project’s success and making
today’s launch possible. Let me also appreciate our technical partner, the
Kenya National Bureau of Statistics (KNBS), for providing critical support
to the initiative.
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Ladies and Gentlemen: During the launch of the Third National
FinAccess 2013 Survey, the Government recognized the important role
played by the financial system in the economy. Our Vision 2030 envisages
the financial sector being transformed into an innovative, vibrant and
globally competitive sector to drive high levels of savings to finance the
country’s investment needs. The transformation entails doubling deposits
mobilization from 44% to 80% of GDP and enhancing growth of savings
channelled into productive investments from 14% to over 30%. This goal
cannot be achieved if the Vision’s three core objectives, namely:
Enhancing Financial System Stability, Efficiency, and Expanding
Financial Inclusion are not addressed.
Without expanding inclusion to financial services, there is a
case for expanding quality access and affordable, appropriate and
sustainable financial services and products to majority of the
population. This will inevitably increase their access and usage of
financial markets and products that will encourage savings/investments
and allow capital/asset accumulation. Safe havens for savings by the
poor reduces their vulnerability to periodic economic and social shocks
and enhances their productive capacity.
The Three National Financial Access Surveys for 2006, 2009
and 2013 have clearly demonstrated that Kenya’s financial landscape
has changed considerably over the period 2006-2013. The financial
system is now offering a wider range of financial services and products
to more Kenyans, covering a wider geographical spread, and even going
beyond its borders more than ever before. These developments are
attributable to expansions in financial sector infrastructure (including
innovation in products and adaptive institutional outreach) and
advances in technology.
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Ladies and Gentlemen: I am delighted to note that we have added the
spatial mapping of financial services providers to the FinAccess Surveys by
digitally mapping out all the financial access touch points in the country.
This affords us more in-depth knowledge on how to address the challenges
we face in expanding financial inclusion and ensure that the majority of our
populace access and use affordable, appropriate and sustainable financial
services. Some of the insights we have gained from the mapping exercise
include:
Kenya enjoys better financial access compared to countries in the
region. The percentage of the population living within a 3km distance
of a financial access touch point is 58.7% for Kenya, 44.1% for
Uganda, 42.7% for Nigeria and 28.3% for Tanzania. In terms of
financial access touch points per 100,000 people; Kenya has 161.7,
Uganda 63.1, Tanzania 48.9 and Nigeria 11.4.
Financial services touch points tend to be located in economically
active regions of the country: more in urban than in rural areas. In
these areas use of portfolios of financial services is more prevalent.
Financial services touch points locate away from areas of high poverty
levels, for instance, 69% of all financial access touch points are
located in areas with the least likelihood of poverty even though only
30% of the population live in those areas.
Kenyans have greater access to mobile phone financial services
providers compared to banks. For example, Kenyans living within
3km of a mobile phone money agent is 58.6% or 23.64 million
compared to only 21.2% or 8.57 million living near a bank branch.
Ladies and Gentlemen: The results we are releasing today are as a result
of developments in the wider economy, infrastructural facilities,
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technological innovation, institutional developments, natural features, as
well as financial system policy and regulatory reforms, increased
competition and innovations in the financial market. These developments
have set off a dramatic shift away from the traditional delivery of financial
services. In the delivery of financial services, innovations using technology
such as Automatic Teller Machines (ATMs), Point-of-Sale (POS) devices,
the internet and mobile phone platforms and its interlinkages with financial
institutions platforms have accelerated and moved us closer to branchless
banking. We, however, still have some ground to cover in expanding access
to financial services, given that about 25% of the population remains totally
excluded.
Ladies and Gentlemen: The information generated by this spatial
mapping exercise will help financial service providers identify where
opportunities exist. I am delighted that the sector now has such a useful
information resource at its disposal. The results from all these efforts will
help the public and private sector to better understand the developments
and dynamism of the broader Kenyan financial market landscape and its
dynamics in order to develop appropriate policy strategies and products as
well as delivery channels to targeted clientele that they have not served
before.
Ladies and Gentlemen: The GIS Spatial Mapping Project brings forth
more information necessary to satisfy the objectives of the Financial Access
Partnership, which remain;
(i) To provide information to policymakers about the main barriers to
financial access and inclusion;
(ii) To provide information to the private sector on market conditions
and opportunities;
(iii) To provide a solid empirical basis to track progress on financial
inclusion and evaluate the effect of government, donor and industry
led initiatives;
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(iv) To provide data for use in research into the impact of access to
financial services and products on growth, development and poverty
reduction.
In conclusion, Ladies and Gentlemen, let me also observe that the
FinAccess studies have been championed and driven by a partnership
between public and private institutions. I commend and support such
initiatives and hope that this lays the foundation for a deeper and sustained
partnership between the public and private sector in tackling the challenges
and taking advantage of opportunities that arise. In this regard, as I have
always done, I thank all the institutions under the Financial Access
Partnership that have contributed in various ways towards the Spatial
Mapping Project and The Bill and Melinda Gates Foundation. I urge
financial services providers and the domestic sector regulators to work out
modalities of collecting the spatial data of all the financial services touch
points. The Research and Policy Analysis Department of the Bank will
champion these efforts.
With these few remarks, Ladies and Gentlemen, I welcome you to
this breakfast event and launch the financial access web portal
and look forward to further fruitful deliberations.
THANK YOU
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