s financial sector including introduction of the cis mechanism, the sector has recorded improved efficiency. similarly, formal financial inclusion has been on an upward trend from 26. 4 % in 2006 to 66. 7 % in 2013. consequently, financial stability has been strengthened through the enhanced credit risk management systems as well as the improved economic conditions. despite this progress, the current level of private sector credit in kenya of about 40 % of gross domestic product is still far below the levels recorded in comparable emerging economies such as malaysia, south africa and mauritius. the main factor cited as impeding private sector credit in kenya is high lending rates, that can be dealt with through concerted bis central bankers ’ speeches efforts of all players in the sector. with akcp bringing together several categories of credit providers, its voice on this issue and the technology to provide sustainable solutions should be loud enough. ladies and gentlemen : as you may be aware, a high level committee was established under the leadership of the cabinet secretary to the national treasury in january 2014 to explore ways of increasing the supply private sector credit and mortgage finance in kenya. the main focus of the committee was to make proposals for transparent pricing that should allow competition and movements in the market and thus lower lending rates commensurate to returns on investments as well as reduce the risk profile and premium loaded to market participants. the committee finalized its task in april 2014. among the recommendations made by the committee was the introduction of a transparent pricing mechanism, where all banks price their loans based on a common reference rate, the kenya banks ’ reference rate ( kbrr ). kbrr became effective on 8th july 2014 and borrowers are now able to compare lending rates across banks. prior to this, every bank had its own base rate, whose composition was not known to the borrowers and so not comparable. banks are now required to explain to their customers and the central bank the composition of the premium ( k ) they charge above the kbrr. the central bank will shortly start to periodically publish, on its website, the details of the premiums ( k ) obtained through returns from banks. this will promote transparency and competition in the pricing of credit. this is one of the avenues of increasing credit to the productive and profitable sectors of our economy. ladies and gentlemen : credit information sharing ( cis ) plays a critical role in enhancing credit to the private sector. it enables credit providers to undertake effective credit risk assessment based on the available credit histories whereas the borrowers are able to negotiate for better credit

terms based on their good credit histories. since the rollout of the cis mechanism in 2010, commercial banks and microfinance banks had requested more than 4. 8 million credit reports from the two licensed credit reference bureaus as at 30th september 2014. the borrowers have on the other hand accessed 77, 422 credit reports over the same period. as the full - file sharing introduced in february 2014 takes root, the usage of the cis mechanism will continue increasing. ladies and gentlemen : as already alluded to, the establishment of akcp was informed by our desire to optimize the benefits of the cis mechanism. this is only possible when most of the credit providers are participants. that is why akcp ’ s initial task is to recruit credit providers who are not yet members of the association. we all appreciate that most kenyans are multi - borrowers and their credit reports can only be complete if all credit providers participate in the cis mechanism. a wider membership of akcp enhances a quick optimization of the benefits to be derived from the cis mechanism. this is only possible when an encompassing regulatory framework for all credit providers, both regulated and nonregulated, is developed. this is the other main task for akcp. ladies and gentlemen : when cis was launched, the only products on offer were basic credit reports. however, the introduction of full - file credit information sharing in february 2014 enabled credit reference bureaus to introduce value added products such as credit scoring. credit scoring not only enriches the value of credit reports to the lenders but greatly improves the lenders credit risk management. credit scores will help borrowers to know their risk profiles and how their loans will be priced. credit scoring will also go a long way to complement the kenya banks reference rate ( kbrr ). this is because credit scores will form an objective basis for credit providers to determine the risk premium to be charged above kbrr. ladies and gentlemen : as i conclude, i challenge all players represented here today to closely work with akcp to ensure the realization of its strategic objectives. as identified in bis central bankers ’ speeches the government report on increasing private sector credit and mortgage finance in kenya, cis has an important role to play in promoting access to affordable credit. the report encourages full implementation of the credit reference bureau regulations 2013 as well as the expansion of the mechanism to non - banks. in order to ensure sustainability of this new association, i urge all potential members to support akcp via membership subscriptions and other