- taking mfis which include licensing requirements ; corporate governance ; performance and accounting standards ; accountability and transparency ; deposit protection ; dissolution mechanisms and supervision by the central bank. the legislation further specifies limits on lending to ensure that mfis retain their core business of extending services to the poor, low - income households and smes as their core market segments and minimize dealings with insiders. ladies and gentlemen, i expect institutions to use innovative delivery channels and methodologies and reduce entry barriers resulting in increased efficiency and competition, hence reduction in costs and increased access in the near future. the ability to create new innovations and harness their potential will directly impact our market share and prosperity. through new ideas, best practices, innovative delivery channels and approaches, we can stimulate new thinking and, critically, new action. unleashing home - grown capital can create a pool of resources for local entrepreneurs to set up small business and diversify their economic base. microfinance, a new pillar of development, is yet another instrument to unleash the ideas and energies of local entrepreneurs with a potential to grow, to forge linkages with other businesses that will drive national savings and investments. ladies and gentlemen, the central bank, on its part, will continue to ensure macroeconomic stability and to provide an enabling regulatory environment for the financial sector growth and development. the supervisory and regulatory capacity of the central bank of kenya is strong and is continually being enhanced to cope with market dynamics and new skills and knowledge. we continue to be grateful to the development partners who have collaborated with us in building adequate skills and capacity in the field of microfinance. we shall also continue to work closely with the government ministries and microfinance practitioners in the development of the industry. ladies and gentlemen, we all would like to thank the attorney general ’ s chambers and the treasury who have tirelessly worked hard hand in hand with the central bank team in the preparation of the regulations and look forward to a speedy gazettement of the same to effect the act into operation. before i conclude, ladies and gentlemen, let me once again take this opportunity to assure the amfi, microfinance industry players and key stakeholders of the central bank ’ s continued commitment, collaboration and partnership in the development of the industry. finally, it is my pleasure to now declare the forum on the deposit - taking microfinance regulations 2008 officially opened and wish you fruitful deliberations. thank you.

by formal financial sector, namely commercial banks and the kenya post office savings bank, while 8 per cent are served by semi - formal financial service providers such as microfinance institutions ( mfis ) and savings and credit co - operatives societies ( saccos ) and the remaining 35 per cent are served by informal financial service providers ranging from accumulating and rotating savings and credit associations ( ascas and roscas ) to shopkeepers and money lenders. this indicates a big gap in access to financial services by kenyans that i expect deposittaking microfinance institutions ( mfis ) to play a major role in filling it by expanding access. given this scenario the microfinance deposit taking institutions will be playing a major role in narrowing the service gap. ladies and gentlemen, the former un secretary - general, kofi annan stated that “ sustainable access to microfinance helps alleviate poverty by generating income and wealth, creating jobs, allowing children to go to school, enabling families to obtain health care and empowering people to make the choices that best serve their needs. … the great challenge before us is to address the constraints that exclude people from full participation in the financial sector. ” i couldn ’ t agree more and this is the challenge before us. a financial system that serves only a minority of a country ’ s people is biased and unacceptable. all inclusive financial system that provides access for the majority is the central goal of the development of our financial system as envisaged by vision 2030. the government, as envisaged in vision 2030, will strengthen alternative financial service providers including mfis and saccos, among others, to play a major role in savings mobilization and wealth creation, thus contributing to poverty reduction and economic growth. ladies and gentlemen, we expect that when the act and regulations are fully implemented, it will bring, in the not too distant future, a new breed of microfinance institutions, the deposittaking mfis, which will enable these institutions to mobilise savings from the general public. thus, the act and regulations will set in a new era in the growth and development of the microfinance industry by integrating the industry to the formal financial sector, thereby promoting competition, efficiency and access. through this, we expect the microfinance industry to play a pivotal role in deepening financial markets by expanding access of affordable, appropriate and innovative financial services and products to majority of kenyans. these include cellular phone banking, alternative, low cost