participants to fulfil their settlement obligations on time, even in the face of the bear sterns and lehman brothers holding inc. ( lehman ) episodes, widespread counter party credit concerns in the latter part of 2008, and the generally strained financial markets over the past two years. economic efficiency : the speed at which transfer of value is effected between economic entities has assumed greater significance over the years as economies grow and the level of economic activity increases leading to the payments system processing and settling a large volume and value of payments. an efficient payment system results in an increased velocity of circulation of money as a result of faster transfer of funds between economic entities. this in turn has a positive impact on economic growth as shown by economic theories. studies by economists indicate that an economy can save 1 – 3 % of its gdp in terms of both private and social costs if it is able to increase the velocity of circulation of money by completely switching to electronic payments. an efficient payment system also reduces the cost of transactions and is crucial for the orderly functioning of inter - bank, money, capital and security markets. monetary policy transmission : another significant reason for the importance of payment systems is the role they play in efficiently transmitting monetary policy signals to the markets and economy as a whole. the monetary policy actions of the central bank influence either the quantity of money ( i. e. money supply ) or the price of money ( i. e. interest rates at the short - end of the curve ). both these measures require a reliable large - value payment system with same - day ( preferably real - time as is the norm ) settlement. the effectiveness of any monetary policy measure depends to a large extent on the efficacy and soundness of the large - value payment system. besides, a well functioning payment system facilitates effective implementation of monetary policy by supporting accurate and precise measurement of liquidity positions of banks and monetary aggregates. fiscal policy implementation : developments in payment systems have a bearing on implementation of fiscal policy. the speed and turnover of government cash inflows and outflows are directly impacted by the efficiency of payment systems. payment system also plays a critical role in lending and borrowing activities of government. now let me turn to the obvious question, how does our payment system fare in terms of efficiency? let me start with the reserve bank ’ s stated goals towards payment systems which are laid down in the vision document for payment system 2009 – 12. these are to ensure that all the payment and settlement systems operating in the country are “

inaugural inua biashara day 2019 and launch of stawi remarks by dr. patrick njoroge governor, central bank of kenya safari park hotel november 6, 2019 as prepared for delivery i am delighted to be here this morning at the inaugural inua biashara day 2019 and the launch of the lending product stawi. this is a momentous occasion for our banking sector that has come together for the first time to showcase what they are doing for the micro, small and medium - sized enterprises ( msmes ). i am grateful to your excellency for gracing this occasion but more importantly for consistently challenging the banking industry on financing msmes. let me also commend all the banks, the kenya bankers association, and the various government agencies for putting together today ’ s event. msmes are the backbone of kenya ’ s economy, contributing about 28. 4 percent of the gross domestic product. the approximately 7 million msmes are concentrated in the manufacturing, wholesale and retail trade, and transport and storage sectors. the resilience of msmes has indeed been a key strength of kenya ’ s economic growth in recent years. earlier this year, the central bank of kenya ( cbk ) made a deliberate effort to go where the action is to understand the needs of the msmes. we met vibrant traders in gikomba, agile mechanics on ogopa lane, kariokor, traders in the bustling kondele market in kisumu, and creative furniture traders on ngong road. all of them need finance that is convenient, accessible and preserves their dignity as they may not fit the conventional brick - and - mortar bank model. in short, they need ‘ anytime anywhere ’ financial services that are aligned to the nature of their enterprises. following this listening tour, cbk used its convening power to bring banks to the table to provide a solution for msmes. i was pleased to see a consortium of five banks stepping up to the plate when we did a soft launch in may 2019. it is gratifying to note that many more additional banks have joined the initiative. stawi rides on technology and innovation to provide a cost effective ‘ anytime anywhere ’ credit product that is tailored to the needs of msmes. most importantly, it aims at not just providing finance but also supporting them to enhance their credit worthiness, business skills and ultimately grow their businesses. the testimonies we have heard confirm the realization of the vision of shared prosperity. over the