central bank of kenya international money transfer and cross border payment conference ( imtc ) crowne plaza hotel, nairobi remarks by dr. patrick njoroge governor of the central bank of kenya september 21, 2017 as prepared for delivery good morning, ladies and gentlemen! it is a great pleasure for me to join you at this conference. let me begin by thanking the conference organizers for the invitation, and for giving me the opportunity to interact with the distinguished participants. we feel particularly privileged to host this inaugural imtc africa conference in nairobi. it is equally significant for the east african region, which increasingly is viewed as an attractive destination for business and investments. this conference therefore provides an excellent opportunity to reflect on the important topics of remittances and crossborder payments, the challenges and opportunities that lie ahead. the beginnings of our banking system is intertwined with remittances and cross border payments. the first bank in kenya was established in 1896, to facilitate sending money home by indian workers that were building the railway through kenya, and also to support trade in the europe - south africa - india axis. a lot has changed since then. a hundred years ago, remittances depended on the movement of a written instruction over sea and land. it could take months and the transaction faced many perils. today, transfers are virtually instantaneous and current protocols ensure certainty of the transfer. customers ’ interest in a secure and inexpensive remittance channel remain unchanged. the importance of cross border payments cannot be overemphasized. remittance flows to developing countries amounted to us $ 429 billion in 2016, more than twice the amount of foreign aid that these countries received, and have become an important source of foreign exchange. 1 similarly, remittance to sub - saharan africa ( ssa ) amounted to us $ 33 billion in 2016. these remittances are a critical source of income for many households and provide a highly beneficial insurance function. innovations in digital financial services have been transforming the remittance industry. for kenya, prior to 2013 when money remittance regulations were issued, remittance flows were largely through informal channels as banks were deemed prohibitively expensive. since then domestic money transfer products such as m - pesa have evolved to become convenient and reliable platforms which with the expansion of mobile phone technology are now available to large segments of the population. for instance, kenya has a mobile phone penetration rate of 89 percent compared to the sub - sahara africa average of 43

patrick njoroge : financial inclusion in sub - saharan africa keynote address by dr patrick njoroge, governor of the central bank of kenya, at the ticad vi / alliance forum foundation & comesa, nairobi, 26 august 2016. * * * good afternoon! it is my pleasure to be here today, to speak to such a distinguished group about financial inclusion in sub - saharan africa. history teaches us that every nation in every epoch faces many challenges but also opportunities. africa faces many challenges, including realizing sustainable growth to reduce poverty and provide meaningful employment to its young population. at the same time, there are opportunities that are provided by two significant trends – globalization and the it revolution. as we see it, in the financial sphere, financial inclusion combines these two trends to provide great promise in dealing with the present - day challenges. financial inclusion holds the promise of harnessing collaboration between financial service providers and technology service providers to achieve social ends such as inclusive economic growth, sustainable development and poverty alleviation. this forum provides an excellent occasion to reflect on the achievements made, the challenges that remain, and the opportunities that lie ahead in actualizing this promise. my focus today will be to highlight the role that innovation and related policies play in establishing financially inclusive ecosystems that do not marginalize people on the basis of income or geographical location. as is well recognized, kenya has leveraged mobile phone technology and made remarkable strides in financial inclusion. there are currently 38. 3 million mobile phone subscribers in kenya. this has allowed access to formal financial services to grow from 26 percent in 2006 to over 75 percent currently. similarly, other countries in the region have increased financial inclusion ; recently reported numbers are mauritius at 88 percent, south africa at 83 percent, tanzania at 57 percent, and nigeria at 48 percent. while efforts need to be sustained to further increase inclusion and access, the focus has now turned to the products and services that are available. the question at hand is how to expand the digital financial services ecosystem beyond basic money transfer, savings, and micro - credit. innovative solutions are needed to provide a range of digital financial services, from simple money transfer platforms to payment solutions, savings, micro - insurance, financial planning and access to capital markets securities. what framework would ensure that the benefit of financial inclusion are sustained? let me turn to a few considerations to help set a framework for the path ahead. first, there is the perennial question of the cost of such services. developing sustainable digital services that are affordable