njuguna ndung ’ u : investing differently in women speech by prof njuguna ndung ’ u, governor of the central bank of kenya, at the african women ’ s economic summit, nairobi, 18 – 20 march 2010. * * * the right hon. raila odinga, prime minister of the republic of kenya ; hon. uhuru kenyatta, deputy prime minister and minister for finance of the republic of kenya ; mrs. graca machel, founder, new faces, new voices network ; dr. donald kaberuka, president, african development bank ; distinguished guests ; ladies and gentlemen : first, rt. hon. prime minister, may i take this opportunity to thank you most sincerely for finding time from your busy schedule to grace this important forum whose theme is investing differently in women. your presence demonstrates the seriousness with which the government of kenya embraces the role of women and participation in the development process and more importantly their role in the financial sector. may i also heartily thank the new faces, new voices network ( nfnv ), the founder madame graca machel and the african development bank ( afdb ) represented by the president, dr. donald kaberuka for choosing to host the inaugural african women ’ s economic summit ( awes ) in nairobi. this is a great honour to us in kenya. i also warmly welcome all international delegates represented here including fellow central bankers from the region. the rt. hon. prime minister, the central bank of kenya is delighted to partner with afdb and nfvn in this summit especially when the central bank and indeed the government of kenya is in the process of promoting more inclusive financial policies. in the recent past, the government has introduced new institutions to support, shape and deepen the financial sector. examples include : licensing and supervision of deposit taking microfinance institutions ; savings and credit co - operatives ( saccos ) and the saccos regulatory authority ; amendment of the banking act to allow shariah - compliant banking products ; licensing of credit reference bureaus to facilitate credit information sharing ; agent banking for cost effective financial outreach. since we have seen commercial bank branch expansion by over 100 branches in three years, deposits have increased from ksh. 800 billion on to ksh. 1. 01 trillion and accounts from 2. 4m to 8. 4m in the same period. the rt. hon. prime minister, as we commence deliberations at this important summit, it is

and reporting practices, and building adequate capacity among the regulators. this requires moving swiftly to develop smart – standardized, measurable, actionable, reliable and transparent regulatory and supervisory frameworks – surveillance supervisory approaches, and assessment tools. this would effectively safeguard the soundness, integrity, efficiency, and stability of the financial system in kenya and the region. i believe smart regulation is the way to go because its very architecture minimises regulatory burden, focuses on outcomes rather that processes, and applies regulatory measures in proportion to the risk profile of individual institutions. smart regulations allow regulators to enforce more efficiently and allow regulated entities to comply cheaply and reliably. 3. stress testing : stress testing has become a cornerstone of prudential supervision and risk assessment across the world. the central bank has strengthened its capacity and has conducted banking system stress testing exercise using the cihak framework since january 2015. we have drawn important lessons from the results of these exercises and i bis central bankers ’ speeches urge other regulators to adopt similar tools, which clearly demonstrate the value of forwardlooking assessments of risks and vulnerabilities to the financial system. 4. financial innovations and consumer protection : new technologies have expanded the possibilities of financial services and products some of which have brought tremendous benefits to consumers, and resulted in measurable improvements in financial and greater access to the mainstream banking system. however, along with the rapid growth of these financial services is the emergence of complex financial products requiring enhanced consumer protection measures. i see the need to prioritise consumer protection in ways that will reduce if not eliminate consumer susceptibility to abuse or fraudulent activities. an effective consumer protection regime is essential and should broadly entail : • transparency and accountability in pricing ; • clarity on charges and terms of financial products and services ; • avoiding reckless and fraudulent lending practices ; • protection of financial service consumers against over - indebtedness ; • fair debt collections and transparent marketing practices ; • privacy of client data including credit information sharing arrangement amongst all credit providers through credit reference bureaus ; • ethical standards and staff behaviour in credit lending and screening practices ; and • alternative dispute resolution mechanism. in this regard, we should engage with our stakeholders to promote effective financial services consumer protection mechanisms through innovate financial education programmes and regulatory reforms. 5. recovery, crisis management and resolution frameworks : the global financial crisis that has affected us all since 2007, offers important lessons in crisis management and resolution frameworks. an important lesson from that experience is the central