njuguna ndung ’ u : currency centres in kenya remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the launch of currency centres in kenya and the official opening of meru currency centre, cooperative bank, meru branch, 19 august 2011. * * * the deputy prime minister and minister of finance, hon. uhuru kenyatta ; the provincial commissioner, eastern province, ms. claire omollo ; the mp for north imenti, hon. silas ruteere ; his worship the mayor of meru, councillor mr. mwalimu john ; the district commissioner, imenti north, mr. david cherop ; the chief executive officer, co - operative bank kenya limited, mr. gideon muriuki ; the chief executive, kenya bankers association, mr. habil olaka ; commercial bank chief executives and their branch managers here present ; distinguished guests ; ladies and gentlemen : i am greatly pleased and appreciative once again to witness another milestone achievement of the collaborative effort between the central bank of kenya and the kenya bankers association, that is, the launching of currency centres concept in kenya and the official opening of meru currency centre by the deputy prime minister and minister for finance. honourable deputy prime minister and minister for finance, the banking sector has undergone major transformation in the last five years in light of changing consumer needs. the most notable changes have been the rapid expansion of branch networks, increase in client accounts and in the number of automated teller machines ( atms ) across the country, use of agents and mobile phone infrastructure by banks to provide financial services and increased outsourcing of cash processing and movement services. these developments have significantly impacted on currency circulation patterns in the country making it inevitable for the central bank and commercial banks to review how these operations can be conducted cost effectively. honourable deputy prime minister, the central bank of kenya in conjunction with the kenya bankers association embarked on establishing currency centres two years ago. this was done as a way of supporting commercial banks to efficiently provide financial services in various regions of the country and reduce the distance over which cash is moved between one central bank office and the upcountry branches of commercial banks. the main objective is to reduce cost of doing business. honourable minister, the first currency centre under this initiative was established in december 2009 in nyeri followed by nakuru currency centre in december 2010 and meru in february 2011. the three currency centres currently serve a total of

- taking mfis which include licensing requirements ; corporate governance ; performance and accounting standards ; accountability and transparency ; deposit protection ; dissolution mechanisms and supervision by the central bank. the legislation further specifies limits on lending to ensure that mfis retain their core business of extending services to the poor, low - income households and smes as their core market segments and minimize dealings with insiders. ladies and gentlemen, i expect institutions to use innovative delivery channels and methodologies and reduce entry barriers resulting in increased efficiency and competition, hence reduction in costs and increased access in the near future. the ability to create new innovations and harness their potential will directly impact our market share and prosperity. through new ideas, best practices, innovative delivery channels and approaches, we can stimulate new thinking and, critically, new action. unleashing home - grown capital can create a pool of resources for local entrepreneurs to set up small business and diversify their economic base. microfinance, a new pillar of development, is yet another instrument to unleash the ideas and energies of local entrepreneurs with a potential to grow, to forge linkages with other businesses that will drive national savings and investments. ladies and gentlemen, the central bank, on its part, will continue to ensure macroeconomic stability and to provide an enabling regulatory environment for the financial sector growth and development. the supervisory and regulatory capacity of the central bank of kenya is strong and is continually being enhanced to cope with market dynamics and new skills and knowledge. we continue to be grateful to the development partners who have collaborated with us in building adequate skills and capacity in the field of microfinance. we shall also continue to work closely with the government ministries and microfinance practitioners in the development of the industry. ladies and gentlemen, we all would like to thank the attorney general ’ s chambers and the treasury who have tirelessly worked hard hand in hand with the central bank team in the preparation of the regulations and look forward to a speedy gazettement of the same to effect the act into operation. before i conclude, ladies and gentlemen, let me once again take this opportunity to assure the amfi, microfinance industry players and key stakeholders of the central bank ’ s continued commitment, collaboration and partnership in the development of the industry. finally, it is my pleasure to now declare the forum on the deposit - taking microfinance regulations 2008 officially opened and wish you fruitful deliberations. thank you.