alongside financial stability comes another topical issue in development debates across the globe, financial inclusion. for the financial system to be relevant to society, it needs to ensure that as much of the eligible target population has opportunity to access a variety of financial services ranging from credit, savings and payments, transfers, pensions, capital markets and insurance services. inclusion is an essential pre - condition to enhancing wealth creation and poverty reduction and ultimately broad based economic development. the consultative group to assist the poor ( cgap ) defines financial inclusion as a “ state in which all people who can are able to have access to a full suite of quality financial services, provided at affordable prices, in a convenient manner, and with dignity for the clients ”. these financial services are bis central bankers ’ speeches delivered by a range of providers, most of them private, and reach everyone who can use them, including disabled, poor, rural, and other excluded populations. ladies and gentlemen : why should we, as regulators, be concerned about the levels of financial inclusion in our respective jurisdictions? individuals and households lacking adequate access to a full range of responsibly delivered, affordably priced, convenient, formal financial services would be severely constrained in participating fully in the economy. as an entity, the financial sector would also face bleak prospects in terms of expansion and longevity, which holds back overall economic development. but more importantly, financial inclusion is supported by financial stability. in kenya, the proportion of the population totally excluded from formal financial services, as revealed by the finaccess 2006 and 2009 surveys, stood at 38. 3 % and 32. 7 % respectively. the proportionate reduction between the years is largely attributable to the advent of mobilebased financial services which have indeed revolutionized the provision of formal financial services and availed these to the market affordably and conveniently. for us to bring costs of financial services down, we need full inclusion. ladies and gentlemen : given the statistics above, as financial sector regulators, we share common aspirations of making the financial sector more stable, efficient and accessible. though these objectives may at times appear competing, they are for the most part complementary. stability is a pre - requisite for efficiency, while both are in turn required to raise inclusion. in cognizance of this, the central bank, jointly with other players, has undertaken several initiatives and reforms aimed at boosting overall inclusion. these include : licensing of deposit taking microfinance institutions ( dtms ), focusing

from 35 to 27 percent and the excluded falling from 38 to 33 percent, access to finance for rural areas is still low, with 64 percent of the rural populace not accessing formal financial services and 21 percent being excluded from any form of financial services. this is a huge drag to development that is driven by financial access. we know from established wisdom that poverty is very rural based in countries we come from. access to finance allows the poor to escape poverty by building their assets through savings and credit. at the central bank of kenya, we remain committed to promoting innovations that will enhance financial access and inclusion for the people of kenya. these reforms we believe will inevitably enhance access to finance in rural areas. my colleagues will be alluding to these reforms in the course of this conference. ladies and gentlemen : the size of credit to the agricultural sector in kenya by the banking sector has risen over the last five years from usd335 million ( ksh. 28. 1 billion ) in december 2007 to usd620 million ( ksh. 52. 7 billion ) as at february 2011. this growth is explained bis central bankers ’ speeches partly by the outcomes of the initiatives enumerated above. the level is expected to increase once the reform initiatives take root. to conclude my remarks, ladies and gentlemen, let me take this opportunity to reiterate the commitment of central bank of kenya to contribute to the fulfillment of afraca ’ s vision. it is my hope that this conference shall provide participants with key lessons on how to achieve a rural africa where people have access to sustainable financial services for economic development. i also reiterate that it is only through the concerted efforts of all players, governments, development agencies, donors, regulators and service providers that we will be able to deliver on this vision. with those few remarks, ladies and gentlemen, it is now my honour and pleasure to welcome the deputy prime minister and minister for finance, hon. uhuru kenyatta to deliver his keynote address and to officially open the 3rd afraca central banks forum. thank you. bis central bankers ’ speeches