offer “ health solutions ” after a prognosis has been identified. many of the projects financed by first initiative have helped countries tighten their adherence to international standards and codes for the financial sector. in doing so, i belief in the assertions that first has helped developing countries achieve part of their development goals of building an efficient, inclusive and transparent financial system. the fact that first works closely with the recipient institutions to prioritize technical assistance activities that are consistent with the recipient country plans is a great plus. it re - defines development partnership of donors and recipient countries. i note with great pleasure first model of doing business. it encourages recipient governments to identify their financial sector problems, prioritizes them, and then supports viable solutions. it also pools the efforts of several development agencies, leveraging their expertise and reducing duplication. often, first takes on targeted projects and once completed, first disseminates the results to boost their impact and catalyze long - term support from both development partners and recipient governments. in kenya the vision 2030 has identified that the problems of high interest rate spreads and limited access. the focus then is how to reduce these spreads, raise access and deepen the financial sector. the level of solutions require policy reforms that alleviate market, institutional and political barriers to competition. the vision 2030 has identified areas in which policy reforms can have a major impact in reducing such barriers and thus increasing the effectiveness and competitiveness of financial intermediation. here in kenya, i would like to acknowledge an initiative such as finaccess initiated and partly funded by first which has given us the survey information which has become an integral part of financial market processes and analyses. the results have helped us understand some of the issues in the financial sector and have provided us a better understanding on how to develop the sector. there is an increasing body of evidence to support the view that financial sector development contributes to both economic growth and poverty reduction by affording people greater access to finance. going forward going forward, i have noted with satisfaction that first will seek to strengthen the causal links between its technical assistance and the contributions of deep, orderly financial systems to economic growth, poverty reduction, and social equity. first will do this by increasing its emphasis on achieving market development outcomes, and filling gaps in domestic financial markets. it will also continue to give priority to supporting governments in lower - income countries in developing action plans geared toward these outcomes. such a move is welcomed in the region where there has been a very

strong upward trend in diversification of economic activities among rural households over the decade. one robust finding of the rural panel analysis is the importance of access to credit as a correlate of escaping from poverty. in kenya for example, most ( 70 percent of ) kenyans do not have access to any form of credit. for those who do access loans, there is significant disparity in average amounts – with non - poor households borrowing 42 percent above the average amount, and poor households 77 percent below ; the advantage for urban households is even larger, whereas female headed are way below average ( world bank 2008 ). the question is whether we have adequate financial vehicles for each of these diverse house - holds. financial stability and development are a crucial prerequisite and a facilitator of reforms in other sectors, including private sector development, infrastructure, housing, and social policies. financial sector development is vitally linked to growth and poverty reduction. wellfunctioning financial systems channel funds to productive uses essential for a country ’ s transformation. financial services in kenya, we have identified that a well - functioning financial system is critical to accelerating economic growth. that is, a vibrant and globally competitive financial sector will drive high levels of savings and finance kenya ’ s investment need. according to the financial access survey 2007, by fsd kenya, the banking sector serves only 19 per cent of kenya ’ s bankable population with 8 per cent being served by other financial services providers such as mfis and saccos. 38 per cent are totally excluded and 35 per cent rely on informal financial services providers. the evidence is also that access to financial services outside the main cities still remains limited. the introduction of mfi ’ s, the sacco ’ s and crbs will produce the best financial infrastructure to reach all segments of the economy and information flow to help them function properly. for kenya to achieve its aspirations of vision 2030, the levels of investment will require a continuous increase in the level of national savings to sustain economic growth. in this regard, financial sector reform measures will be implemented and more savings products developed to support the requisite national savings. to do so i intend to suggest areas where support of first initiative will be most welcomed in kenya ’ s case, but also applies to most countries in ssa : • enhance the role of the government in the financial sector to provide a legal, regulatory, and supervisory framework that promotes soundness and competition in the sector. more support for the review, amendment