njuguna ndung ’ u : the future of financial service delivery in kenya remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the opening of the 3rd afraca central banks ’ forum, kenya, 9 may 2011. * * * the deputy prime minister and minister for finance, honourable uhuru kenyatta ; the afraca chairman and deputy governor, central bank of congo ; the secretary general, afraca ; governors of central banks here present ; representatives of banks, microfinance institutions and other financial institutions ; distinguished guests and participants ; ladies and gentlemen : i am delighted to be with all of you here in mombasa to make some brief remarks at this very auspicious 3rd afraca central banks forum. i am here to welcome the deputy prime minister and minister for finance to officially open this forum, but before doing that, i wish to make a few remarks. on behalf of the central bank of kenya which is co - hosting this forum with afraca, let me extend a very warm welcome to all delegates to kenya and in particular to mombasa, a spectacular tourist town. it is my sincere hope that you will enjoy your stay in kenya and will also find time during the forum or after to sample kenya ’ s tourist attractions. ladies and gentlemen : afraca organizes this bi - annual central banks forum as an avenue for afraca member central banks and other regulatory bodies to share experiences on workable solutions towards enhanced agricultural and rural financing as well as to challenge each other on possible policy solutions to increase agricultural and rural financing. in this regard, the forum serves to further afraca ’ s vision of “ achieving a rural africa where people have access to sustainable financial services for economic development ”. the theme of this forum ; “ financial services for food security : leveraging on innovation ” is quite timely and anchors well with the emerging trend whereby most of the agricultural land is being urbanized as well as the drastic climatic changes arising from global warming, which are posing a serious threat to food security for the future generations. time to generate solutions to curtail this trend is now. but from our end, we focus on financial support investment to increase productivity in the sector. although kenya ’ s two financial access surveys conducted in 2006 and 2009 have shown general improvements in financial access with access to formal finance improving from 19 to 23 percent ; to semi - formal improving from 8 to 18 percent ; informal declining

are naturally also risks and challenges that need to be clearly identified. the ever closer integration of national economies and the rise in capital mobility have made the international system more vulnerable to changes in investor sentiment. furthermore, international trade and financial links intensify the transmission of shocks from one country to another and amplify cross - border spillovers. a cost - benefit - analysis of the global economic trends clearly shows that the benefits outweigh the costs by far. that said, it would be short - sighted to take this outcome for granted. one should not forget that not long ago a number of severe financial crises posed a major threat to the international financial system : the debt crises during the 1980s, which started in poland and mexico and spread to latin america, africa, the middle east and the soviet union ; the mexican crisis in 1994 ; the asian crisis starting in 1997 ; the russian crisis in 1998 ; and the argentinean crisis in 2001 - 02. the international community managed to resolve these crises successfully, with each crisis bringing about a learning process. each case was different, the underlying reasons were different, and hence the necessary responses had to be adapted to the specifics at that moment. past crises shed light on the vulnerabilities of the global economic and financial system and remind us of the importance of never being complacent. the major global economic trends, which i have just sketched out, make it increasingly difficult for policymakers to provide the public good of global economic and financial stability. and consequently, strengthening the resilience of the global system has become an ever more demanding task. this brings me to look at some key international fora and institutions in charge of international macroeconomic and financial issues and see how they have adapted to a changing global economic environment and evolving policy challenges. 2. the international financial architecture – where do we stand? in response to the global economic and financial trends just outlined, international fora and institutions have undergone major changes both in terms of their structure as well as their focus of activities. i will confine myself to four important areas. first, the involvement of emerging market economies in international fora and institutions. second, reinforced focus on the multilateral and regional dimension of monitoring and surveillance. third, development and agreement on global standards and codes. fourth, increasing attention to the integration of macroeconomic and financial surveillance. let me address these issues in turn. involvement of emerging market economies the g7 has been instrumental in shaping the international financial architecture as it