njuguna ndung ’ u : building a platform for greater partnership remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the business editors ’ workshop, naivasha, 2 may 2014. * * * dr. haron sirima, deputy governor, central bank of kenya mr. jaindi kisero, managing editor ( economic affairs ), daily nation business editors here present central bank of kenya colleagues other distinguished participants ladies and gentlemen i would like to register my profound appreciation to you, members of the fourth estate for making time to attend this workshop. no doubt, your role as editors is extremely demanding on your time. i believe this workshop in an important step in enhancing the partnership between the central bank and the media, in line with the theme, building a platform for greater partnership. as you may already be aware, it was once believed that central banks needed to be as uncommunicative and as secretive as possible due to the conventional idea that doing so would safeguard the autonomy of policy making, coupled with the perceived wisdom of saying as little as possible. however, the last 15 or so years has witnessed tectonic shifts regarding how central banks view their communications. central banks have recently begun to engage in public communications more proactively and purposely. the shift is validated by the linkage between enhanced communication and the achievement of economic outcomes. transparency in the policy making process creates partnerships and best outcomes. ladies and gentlemen : communication is essential to the functioning of a modern central bank as a policy tool rather than merely a means of conveying information, as traditionally understood. communication enhances the effectiveness of policy by improving the public understanding of policy objectives and enhancing the legitimacy of the message. an overriding priority for a central bank is to provide financial markets, and by extension the general public, the confidence that its policy actions are in the public interest. by clearly explaining its objectives, central banks gain public support and in the process, secure the opportunity to shape expectations and influence behavior in a desired direction. additionally, the prevailing emphasis on communication is informed by the need to balance increased demands for central bank independence with an equally necessary accountability to the public. that means ensuring that policy objectives are communicated in a manner that is understood and comprehended by the target audience. by investing in communication, central banks earn the trust of the public to pursue its strategic priorities independently. in addition, the decisions made by the central banks are themselves important inputs to

njuguna ndung ’ u : increasing access to credit keynote address by prof njuguna ndung ’ u, governor of the central bank of kenya, at the official launch of the first licensed credit reference bureau – crb africa limited, nairobi, 4 march 2010. * * * chairman, crb africa – mr. michael karanja ; chief executive officer, crb africa – mr. wachira ndege ; board members, crb africa, here present ; chair, kba – mr. martin oduor - otieno ; executive director, kba – mr. john wanyela ; chair, vision 2030 delivery board – dr. james mwangi ; distinguished guests ; ladies and gentlemen : i am pleased to join crb africa and the banking fraternity in the launch of the first ever licensed credit reference bureau in kenya. the launch marks a new dawn in the kenyan banking sector. it is the first and most important step towards building information capital. the second step will be for the banks and the public to share this information ; and the third step will be to use the information to develop the market and to make appropriate decisions. i would like to commend the board and management of crb africa for their enterprising efforts culminating in their being licensed as the pioneering credit reference bureau in kenya. this is a landmark achievement worthy of congratulations from each one of us. ladies and gentlemen : the main objective is to increase access to credit. we know the benefits of credit access and cost effectiveness of that credit to development at the firm level and at the household level. allow me to focus briefly on the benefits which cbk sees as accruing from the adoption of credit information sharing in kenya. first, credit information sharing will facilitate the development of information capital. the risk premium associated with information asymmetry will henceforth be eroded. this will allow cost of credit to decline substantially. second, information capital will change the current collateral technology. credit by the banking sector in kenya has to a large extent been underwritten by physical collateral such as land and buildings and costs of evaluating that collateral – with inappropriate definition of property rights. borrowers without access to such collateral have been constrained from accessing credit. credit information sharing will thus enable borrowers to build a track record ( reputational capital ) that they can use to access credit. this will especially be pertinent to those borrowers in the informal and small and medium enterprises ( sm