njuguna ndung ’ u : the kenyan money market and other key developments in the financial sector foreword message by prof njuguna ndung ’ u, governor of the central bank of kenya, for the kenya national chamber of commerce, mombasa branch chronicle, “ business financing edition ”, june 2007 issue. * * * i am honoured and privileged for the opportunity to share the central bank ’ s thoughts on the kenyan money market specifically and other key developments in the financial sector generally. it is important to underscore at the onset, the mandate of the cbk which is principally to foster, price, monetary and financial stability, supervision of efficient and effective payment, clearing and settlement systems. currently the ambit of the central bank supervision extends to commercial banks, mortgage finance companies and non bank financial institutions licensed under the banking act. deposit taking microfinance institutions are also expected to come under the purview of the cbk once the microfinance act, 2006 is operationalized by the minister of finance. money markets play a key role in providing a channel for savings which can be mobilised to fund productive ventures in the economy. it is generally agreed that there are positive linkages between mobilisation of savings, channelling them to productive investments and poverty reduction. this is important especially when poverty is caused by lack of access to credit and productive investment. the banking sector currently offers an array of products that can be considered as channels of deposits and savings. they range from savings accounts to fixed deposit accounts. they offer a return by way of periodic interest on amounts saved or on maturity for fixed deposits. there has however been public outcry on the returns received on these products which are considered meagre in comparison to the rates charged on loans and also the charges on these products. from an analytical point of view, most of these products have negative returns in real terms. the cbk in a bid enhance the competitiveness of these products, embarked on publication of charges in the print media in 2003. this initiative was expected to reduce the charges on the products thus increasing their “ net return ” the publications which had been suspended in 2005 are being reviewed to sharpen their effectiveness in promoting market discipline. it is also noteworthy that the banking act was recently amended to restrict charges on savings accounts. in its role as fiscal agent of the government, the cbk also raises funds for the government through treasury bills and bonds. these instruments offer a secure investment vehicle with the bills

technology, e - commerce, entertainment and other services have increased their reach and influence during the pandemic. globally, microsoft, google, meta ( formely facebook ), amazon and apple are the face of bigtechs. but beyond the united states, alibaba and tencent in china, mercado libre ( online market ) in latin america, ride - hailing services grub and gojek in south east asia, and mobile phone financial services firms in africa are increasingly exhibiting the characteristics of bigtechs though on a more regional scale. the global bigtechs are now estimated at 20 percent of the market capitalization on the new york stock exchange. to paint the picture more vividly, apple took 42 years to reach a market capitalization of us $ 1 trillion and 2 years to hit us $ 2 trillion. shockingly, all of the second trillion in valuation came in just 21 weeks to august 2020! the bigtechs have far and away displaced the traditional bluechips companies in manufacturing and aviation such as general electric and boeing in their dominance. second, is the proliferation of technology and innovations. from mobile banking to cloud computing, artificial intelligence to blockchain technology, internet of things, and robotics. all these developments herald significant opportunities to re - engineer the operations of governments and business and transform lives and livelihoods. indeed, we are at the cusp of the fourth industrial revolution, whose transformative powers are already evident in the financial sector, and will transform the way we live, work, and relate to one another. in the words of professor klaus schwab, who popularized this label : “ it is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. ” some of these technologies, such as artificial intelligence ( ai ) present significant opportunities to address some of our most pressing problems on the continent. for instance, despite micro, small and medium enterprises ( msmes ) being the engines of our economies, access to credit remains a key challenge. this in part arises from lack of traditional collateral such as title deeds used by financial institutions to secure credit facilities. with the proliferation of digital footprints, ai can be used to generate credit histories of msmes. these credit histories can then be used to appraise and appropriately price credit for msmes that would otherwise be excluded from accessing credit. the potential of ai extends to other critical areas including retail, advertising, manufacturing and health. but these