njuguna ndung ’ u : regulation and supervision of the forex bureau industry in kenya talking notes of prof njuguna ndung ’ u, governor of the central bank of kenya, for the meeting with the kenya forex bureaus association ( kfba ), nairobi, 22 august 2007. * * * the chairman, kfba ; distinguished guests ; ladies and gentlemen ; 1. let me take this opportunity to invite you all to the cbk during this very important occasion to meet the forex bureau industry representatives as part of our partnership and to discuss and share experiences on industry matters. 2. before i proceed, let me thank the association for honouring our invitation and my staff for the presentation, which has clearly laid down the industry landscape and set the stage for our meeting. i hope this does form a platform through which we share experiences as well as challenges. 3. ladies and gentlemen, first and foremost, let me emphasize the role of regulation and supervision of the forex bureaus in kenya, which aims to : • develop a strong, stable and viable forex bureau industry ; • inculcate good corporate governance practices in forex bureaus ; • ensure there is adequate internal control and management information systems in forex bureaus ; and • ensure forex bureaus to comply with the act and guidelines. all these factors enhance healthy developments for any firm in business. but since bureaus are special, we shall continue to attach a lot of importance to compliance and enforce the act and guidelines including suspension and revocation of licences. 4. however, we expect forex bureaus to cooperate and partner with the central bank in the development of the forex bureau industry. 5. let me now turn to specific matters that touches on certain specific issues on the industry. these include : a ) moratorium : as you are aware, the central bank had in the past imposed a moratorium on licensing new forex bureaus. this was done in order to : • allow newly established forex bureau industry to grow and individual bureaus to consolidate • ensure market discipline in the foreign exchange market by developing appropriate frameworks for regulation and supervision ; and • enforce government concerns on money laundering and related financial crimes. after a careful assessment, the central bank has lifted the moratorium on licensing of new forex bureaus including those to be located in the nairobi and mombasa central business districts. b ) industry image : the continued existence of the moratorium can

adverse impact on lives and livelihoods. we will need to accelerate digital ecosystems that will enable the smes to reconnect with their customers, markets and access the much needed finance for recovery. i therefore look forward to the panel discussions later today on reinventing smes through digital ecosystems that will provide an african perspective. i am sure that this will be supplemented by the global perspectives from the united nations development program on wednesday on inclusive digital finance for smes. however, we must remember that it is not just about digital platforms or finance, we also need to consider how to retool the skills and business models of smes as they pivot to the post covid - 19 era. second, is partnerships and collaborations. as we move forward, agility will be imperative particularly for incumbent institutions as they respond to changing customer preferences for anytime anywhere services. even before the pandemic, incumbent banks and telecommunication companies had started to develop partnerships with agile fintech companies. this trend will have to be accelerated in a safe and sustainable manner as we build back. we will this week hear from eminent leaders in the banking, telecommunication and technology sectors on their partnership and collaboration strategies. more interestingly, we will also hear from fintechs and start - ups on their journeys through the pandemic and the value proposition that they bring to building an inclusive ecosystem. third, is sustainable finance. at the heart of post covid - 19 recovery will be a renewed focus on people, purpose and planet ( 3ps ). for resilience, finance must take into account environmental, social and governance considerations. this is an area that the kenyan banking sector is setting the pace on. in 2015, kenyan banks established the sustainable finance initiative to embed sustainability in their values and processes. it is therefore befitting that some of the leading kenyan banks in these areas will be sharing their sustainable finance experiences and strategies going forward later this week. as we explore the opportunities of digitalization, we must remain seized of the risks. in particular, cybersecurity and data governance pose a risk particularly for the increased number of our citizens who are accessing digital systems for the first time. we must therefore ensure that we reflect on how to build cyber resilience in the new normal. equally important is the protection of data on digital platforms that increasingly transcend national borders. we need to urgently explore ways of ensuring our citizens are digitally literate and all participants in the digital ecosystem exercise responsible digital leadership and