an african vision for sustainable finance dr. patrick njoroge ( 822 words ) on september 22, 2019, on the eve of the united nations ( un ) climate action summit, the un launched the principles for responsible banking, with 130 banks collectively holding usd 47 trillion in assets or one third of the global banking sector signed up. in these principles, the banks commit to strategically align their business with the goals of the paris agreement on climate change and the sustainable development goals ( sdgs ) and massively scale up their contribution to the achievement of both. it is gratifying to note the strong presence of african banks, including kcb bank, in the list of founding signatories to implement the principles. sustainable finance has gained traction particularly after the global financial crisis in 20072008. the crisis was in part fuelled by the short termism of the global financial sector. the short - term drive for profits trumped more long term societal good. sustainable finance takes a long term view and integrates environmental, social and governance criteria in business and investment decisions for the benefit of customers and society at large. green finance is a critical component of sustainable finance and refers to raising capital and financial investments into companies, services, products and projects that accelerate the development of an environment friendly and climate - resilient economy. sdg 8 captures the essence of sustainability as it seeks ‘ to promote sustained, inclusive and sustainable growth, full and productive employment and decent work for all. ’ in particular, sdg 8 emphasizes the strengthening of the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all. globally, about usd 5 - 7 trillion per year is required to implement the sdgs with developing countries facing an annual investment gap of usd 2. 5 trillion in areas such as infrastructure, water and sanitation and agriculture. the bridging of this funding gap will require global partnerships, deepening of financial and capital markets and leveraging on innovation. africa has not been left behind in the sustainable finance agenda, but much more remains to be done. africa contributes least to global pollution but is impacted the most. for instance, it is estimated that africa is responsible for only 4 percent of global greenhouse gas emissions, yet 65 percent of the population of the continent is considered to be directly impacted by climate change. african countries akin to other developing countries globally also face a significant funding gap in meeting the sdgs. the need for sustainable finance is therefore critical and immediate for african countries

banking services reach especially to rural areas to help drive increased domestic savings. 5. in this regard, it is imperative for stakeholders to explore mechanisms to deliver financial services and push forward the financial inclusion frontiers in tandem with vision 2030. as a first step in pushing the initiative forward, the banking act was amended through the finance act 2009 permitting banks to use third parties ( agent banking ) to provide certain banking services on their behalf. i take this opportunity to urge banks to take advantage of the new provision. the agent banking model was designed to assist banks to lower their cost of offering banking services while at the same time improving their earnings as more kenyans are offered an opportunity to access financial services. 6. the kenyan banking sector continues to perform well despite the global financial turbulences and challenges on the domestic front. the sector ’ s total assets increased by 21 % from ksh. 1. 20 trillion in march 2009 to ksh. 1. 45 trillion in march 2010 whereas deposits increased by 23 % to ksh. 1. 14 trillion over the same period. profit before tax for the sector increased by 33 % from ksh. 12. 8 billion in the first quarter of 2009 to ksh. 17. 0 billion in the first quarter of 2010. this is remarkable, especially against the backdrop of domestic shocks and global financial crisis. 7. despite the impressive performance by banks, customers still have to contend with high borrowing costs. although many banks have responded to central bank ’ s plea of lowering interest rates, it is our expectation that all the banks should follow to support the economic growth via the support of expanded private sector credit at an affordable cost. on our part, we should now ask the real sector to access and negotiate credit in line with their potential investment. 8. finally, let me reiterate that central bank and indeed the government of kenya will continue to pursue policies that create a conducive environment for growth of the financial sector and encourage the provision of banking services to majority of the un - banked kenyan population at affordable cost. for us to be successful in this, we need to support strong institutional growth and remove underlying constraints that inhibit growth and financial reach. 9. with these few remarks ladies and gentlemen, it is now my honour and pleasure to declare the new brand of consolidated bank of kenya officially launched. thank you and god bless you all.