the central bank because of its impacts on the economy at large as well as its potential to improve the lives of the poor. when the majority of the population has access to and use of quality and affordable financial services and products, it fuels the national savings / investments cycle, thus allowing for capital accumulation and asset building, which enables the poor to escape the poverty cycles. when the poor have secure savings, it reduces their vulnerability to periodic economic and social shocks. increased access to and use of finance will expand the number of participants in our financial system and so lower the unit costs. none of these are trivial impacts. ladies and gentlemen : this morning marks a major milestone as we ruminate on the implications of this important financial diaries study results. i would like to highlight four key findings that i believe have particular bearing on the advancement as well as development of the financial sector in kenya. • the first is that the financial lives of the poor are incredibly dynamic and complex. we have all observed this, in our families, estates and communities, but bis central bankers ’ speeches here we see complexity quantified. the median household has not one income source, but 10 separate income sources! hence, expanding access to financial services is not just about what i ’ m calling the 3ps : presence, price and pushing, but also about relevance and fit with the needs of clients. technological innovations have helped us dramatically increase access and usage in kenya. getting to the next level of application – and application that is meaningful for all kenyans – is going to require a new generation of financial services and service improvements that meet the real needs of markets and people. when we see the diversity and number of financial devices that kenyans are using and continue adapting, we can see that they are willing to try new solutions. this is a good reception to the dynamic solutions coming to the market. the results also highlight important gaps in current offerings in our market, while also giving us a much deeper understanding of peoples ’ earning and spending patterns and behaviour. i hope that these rich insights inspire some creative thinking by the private sector players to tackle product relevance challenge and consider some new approaches to the low income market. • second, the results makes it clear that financial devices play a very important role in helping poor people meet their basic needs and invest in the future. reading the study report, we see how taking a loan from a local bank, one father was able to help his daughter get treatment that she needed after a miscarriage. we see

considerable progress has been made in licensing two dtms, the central bank is concerned at the slow uptake of this new avenue for microfinance institutions to be mainstreamed into the financial sector. we are therefore engaging the microfinance industry through its umbrella body the association of microfinance institutions ( amfi ). this engagement aims at identifying the bottlenecks for microfinance institutions some of which include : costs associated with roll out of branch networks and ict infrastructure. restructuring of shareholding of microfinance institutions to comply with shareholding restrictions specified in the microfinance act. the act restricts shareholding by an individual or entity to 25 % of the institution ’ s share capital. mfis are constituted in various forms including non governmental organisations and trusts. under the act, transforming mfis are required to be incorporated as limited liability companies registered under the companies act. the incorporation process takes considerable time and expense and may deter some mfis from applying for a dtm license. anecdotal evidence also seems to suggest a “ wait and see ” approach by a number of potential deposit taking mfis as they assess the experience and performance of the pioneer regulated dtms. the central bank would like to take upon itself the task of dislodging the “ waiting option ” from this sector of the market. the central bank of kenya is currently drawing up proposals for review of the microfinance legal and regulatory framework. i should stress that the bank will continue to consult with market players as this process moves forward. we therefore, look forward to drawing valuable lessons from this summit to enhance kenya ’ s microfinance legal and regulatory framework. we stand ready to advice, cultivate partnership and only regulate when rules are flouted. with these few remarks, ladies and gentlemen, it is now my honour to welcome the deputy prime minister and minister for finance, hon. uhuru kenyatta to make some remarks to this summit and to invite his excellency the president of the republic of kenya to officially open the africa - middle east microcredit summit. thank you.