njuguna ndung ’ u : strategies to increase the popularity of microcredits introductory remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, during the official opening of the africa - middle east microcredit summit, nairobi, 7 april 2010. * * * your excellency hon. mwai kibaki, president and commander - in - chief of the armed forces of the republic of kenya ; your majesty queen sofia margret victoria frederica of spain ; your royal highness princess maxima of the netherlands ; hon. uhuru kenyatta, deputy prime minister and minister for finance of the republic of kenya ; prof. muhammad yunus, nobel peace laureate and managing director of grameen bank ; mr. sam daley - harris, director microcredit summit campaign ; mrs. lydia koros, chairperson, association of microfinance institutions ; delegates, distinguished guests and participants ; ladies and gentlemen : the central bank of kenya is happy to be part of this very important summit. so let me extend a warm welcome to all the delegates who have come to this summit. it is indeed an honour for kenya to host the 14th africa - middle east microcredit summit. the summit will focus on strategies for ensuring that the vast majority of the world ’ s poorest households can access markets for affordable credit. this summit comes at an opportune time when the microfinance industry in kenya is experiencing rapid changes and legislative support following the enactment of the microfinance act, 2006 which became operational in may 2008. the major challenge prior to the enactment of the act had been lack of a specific legal and regulatory framework as well as appropriate regulatory oversight to guide the specific operations of deposit taking microfinance business in kenya. i should also point out that it was the microfinance practitioners who helped to initiate the process of developing kenya ’ s microfinance legal and regulatory framework through a consultative process. your excellency ; the mfi sector is now transforming to deposit taking institutions. the central bank of kenya has so far issued two licences to faulu kenya dtm and kenya women finance trust dtm to conduct nationwide deposit taking microfinance business. further, a total of eight applications for deposit taking microfinance licences have been received and are in different stages of review and appraisal. the central bank has also approved 34 business names, which is the first step in the licensing process of dtms. while

generate further increase in productivity and competitiveness. at the same time, income from the export of goods, and especially of services contributed to the reduction of the current deficit and the strengthening of the external position of the economy. the effects of the monetary policy have maintained the stimulating trend, aiming at closing the negative gaps of prices and output. financial stability is also characterised by a positive situation. the notable decline in nonperforming loans in the balance sheet of the banking system is the most prominent achievement 1 / 4 bis central bankers'speeches in this aspect. the measures taken in mid - 2016 have produced a substantial effect, materialised in the reduction of non - performing loans by around 10 percentage points, below the maximum level registered in 2015. it is always a pleasure to note that credit growth has been positive. in particular, the lek credit has grown rapidly, compared to the foreign currency credit, which makes the banking system and the private sector healthier, and enhances the effectiveness of bank of albania ’ s monetary policy. positive developments in the banking sector and the economy have supported the further improvement of capitalisation, liquidity and profitability indicators. two months from the end of the year, in our assessment, the banking industry in albania enjoys full financial soundness, against the backdrop of an optimal liquidity and capitalisation situation, a key prerequisite for financially supporting the economic developments of the country. we have also paid particular attention to legal, institutional, regulatory and supervisory developments, notably the drafting and implementation of the resolution law. dear participants, this year marked 25 years from the establishment of a two - tier system in albania, which stipulates the banking system as the provider of financial and banking services in the economy, and the central bank as the administrator of the monetary policy and regulator and supervisor of the banking system. this first step was followed by other steps related to other segments of the financial market, such as the securities and capital markets, including the establishment of the relevant supervisory and regulatory institutions. initiatives in these aspects have promoted a constant expansion of the financial market, in terms of both diverse institutions and number of financial products and trading volumes. yet, despite these developments, the financial system remains dominated by the banking system and relevant developments in it. the last financial stability report of the bank of albania states that banks account for around 90 % of total financial system assets, equivalent to 92 % of the gdp, whereas the rest of the financial sector shares only 10 % of the financial