alongside financial stability comes another topical issue in development debates across the globe, financial inclusion. for the financial system to be relevant to society, it needs to ensure that as much of the eligible target population has opportunity to access a variety of financial services ranging from credit, savings and payments, transfers, pensions, capital markets and insurance services. inclusion is an essential pre - condition to enhancing wealth creation and poverty reduction and ultimately broad based economic development. the consultative group to assist the poor ( cgap ) defines financial inclusion as a “ state in which all people who can are able to have access to a full suite of quality financial services, provided at affordable prices, in a convenient manner, and with dignity for the clients ”. these financial services are bis central bankers ’ speeches delivered by a range of providers, most of them private, and reach everyone who can use them, including disabled, poor, rural, and other excluded populations. ladies and gentlemen : why should we, as regulators, be concerned about the levels of financial inclusion in our respective jurisdictions? individuals and households lacking adequate access to a full range of responsibly delivered, affordably priced, convenient, formal financial services would be severely constrained in participating fully in the economy. as an entity, the financial sector would also face bleak prospects in terms of expansion and longevity, which holds back overall economic development. but more importantly, financial inclusion is supported by financial stability. in kenya, the proportion of the population totally excluded from formal financial services, as revealed by the finaccess 2006 and 2009 surveys, stood at 38. 3 % and 32. 7 % respectively. the proportionate reduction between the years is largely attributable to the advent of mobilebased financial services which have indeed revolutionized the provision of formal financial services and availed these to the market affordably and conveniently. for us to bring costs of financial services down, we need full inclusion. ladies and gentlemen : given the statistics above, as financial sector regulators, we share common aspirations of making the financial sector more stable, efficient and accessible. though these objectives may at times appear competing, they are for the most part complementary. stability is a pre - requisite for efficiency, while both are in turn required to raise inclusion. in cognizance of this, the central bank, jointly with other players, has undertaken several initiatives and reforms aimed at boosting overall inclusion. these include : licensing of deposit taking microfinance institutions ( dtms ), focusing

its membership to associate members, i take this opportunity to urge fellow financial sector regulators to consider joining this worthwhile forum, in order to facilitate joint contributions towards greater inclusion in our local sector. in the same vein, i am pleased to note that both the cbk and cma were recently invited, and accepted to join the regional consultative group for sub - saharan africa of the financial stability board ( fsb ). fsb is a global association established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interests of financial stability. the association brings together national authorities responsible for financial stability in 24 countries and jurisdictions, including regulators and supervisors. membership in the consultative forum will provide both the cbk and cma with an opportunity to contribute in key decision making and policy formulation from a regional and global perspective for the benefit of our entire financial sector. it will also create an avenue to contribute in shaping the development and implementation of financial sector policies aimed at realizing financial stability. i am sure that both the cbk and cma will carry the voices of the other domestic financial sector regulators. ladies and gentlemen : the continuous evolution of the financial sector towards greater sophistication and value provision requires the regulators to move ahead in surveillance and vigilance to maintain the requisite stability and efficiency. for regulators to remain effective in their mandate, they need to remain in step with the financial services industry and its operating environment. for this reason, continuous capacity building is necessary, as is sustained cooperation between the different regulators to ensure coordinated efforts towards financial stability and financial inclusion. thank you for your attention. bis central bankers ’ speeches