central bank of kenya euromoney kenya conference financial inclusion 2. 0 : expanding kenya ’ s digital financial ecosystem tuesday 9th may 2017 welcoming remarks by dr. patrick njoroge governor of the central bank of kenya good morning! 1. it is my pleasure to warmly welcome all delegates to this inaugural euromoney kenya conference. i am particularly pleased to extend a special welcome to those delegates who are visiting our country for the first time. i hope you will enjoy the excellent kenyan hospitality, and that you will find time to visit our national heritage sites within the city before you return to your respective countries. 2. i wish to salute the co - hosts of the conference — euromoney conferences, and the kenya bankers association. i also wish to acknowledge the other institutions that have sponsored and supported the conference : the co - sponsor, kenya commercial bank ; the africa regional partner, african development bank group ; and the supporting organizations, oracle and integrated payment services ltd. ( ipsl ). 3. the theme of this conference “ financial inclusion 2. 0 : expanding kenya ’ s digital financial ecosystem ” provides an excellent opportunity for the policymakers, thought leaders, bankers, investors, and entrepreneurs, all gathered here today as distinguished speakers and participants, to deliberate on the economic environment in africa and the outlook for the financial sector. the sessions will also offer insights on the strategic challenges and opportunities facing digital finance in the region. 4. as is well recognized, kenya has leveraged mobile phone technology and made remarkable strides in financial inclusion. a decade ago, kenya was characterized by high poverty incidences and high levels of financial exclusion. with the adoption of mobile financial services and agency banking, among other innovations, financial access has increased from 26. 7 percent in 2006 to 75. 3 percent in 2016. while this is remarkable, the question at hand remains how to expand the digital financial services ecosystem beyond basic money transfer, savings, and micro - credit. we are equally aware that there are still barriers to financial access that hinder 17. 4 percent of population from accessing the ( formal or informal ) financial system. further, we very much recognize that financial access does not necessarily translate to better living standards — but a journey of a thousand miles starts with a single step. 5. for kenya, current innovations have mainly addressed the issue of convenience of financial products and services to the general public. as a regulator in the financial sector, our focus now is to enhance the usage of the existing financial innovations as well as

##rd ) is in my view the most crucial regulatory change in europe in relation to breaking the bank - sovereign nexus. it represents a true paradigm change, ending the culture of bail - out and ushering in a culture of bail - in. as of 2016, in all resolution cases, the brrd will require a bail - in of shareholders and creditors equal to at least 8 % of total liabilities of a given bank, including own funds. only after the 8 % threshold of bail - in is attained can money from the resolution fund be used and for a maximum amount of 5 % of total liabilities ( including own funds ) of the concerned bank. public money for recapitalisation, either national or european, can thus only be considered at the very end of the process after the other two sources of remedial action have been used. furthermore, the “ government financial stabilisation tools ” that the directive introduces is an instrument of last resort after having assessed and exploited the other resolution tools to the maximum extent possible. bis central bankers ’ speeches the amount of 8 % is very substantial compared to the losses banks faced in the recent crisis. to give you an idea, between 2008 and 2010 only one bank had losses exceeding the 8 % threshold, and the average for all other banks was slightly less than 3 %. thus, under the brrd, the injection of public money into banks, either from national governments or from direct european recapitalisation, will happen only in quite rare occasions. bail - in of shareholders and creditors plus the use of the resolution fund should in most conceivable cases be enough to cover the losses incurred by a failing bank. consequently, part of the debate about direct european recapitalisation and about the role of the srm in delinking banks and sovereigns, was post - factum somewhat misplaced. the implications of this directive are therefore far - reaching. participant countries in the banking union are shedding considerable sovereign power. in fact, large countries with strong public finances are effectively renouncing their ability to provide domestic banks with the implicit subsidy of public support that would reinforce their advantages in increasing their market share. the strength of these banks when competing in the european market will be reduced as the new situation will be progressively reflected in their ratings and funding costs. similarly, countries with vulnerable public finances and smaller banks will no longer be able to support and possibly not be able to keep their national champions. in accepting the transfer of supervision and resolution