microfinance, rural and agricultural finance and setting up of the credit reference bureau have contributed towards improvements in the sector and augur well for future improvements to the sector. i therefore thank the german government for the continued support to uganda in many aspects, but particularly, the support through kfw and giz which is geared towards developing the financial sector in uganda. i wish to highlight the fact that the bank of uganda is cognizant of the challenges in the financial sector and is taking several steps to address them. one such move is our financial inclusion agenda that aims at improving the access and quality of financial services, enhancing consumer protection and creating a larger population that is literate in financial matters and values savings. in order to facilitate the extension of financial services at a greater convenience and cheaper cost to the unbanked population, the bank forwarded to the minister of finance, necessary amendments to the financial institutions act 2004 and the mdi act 2003 to allow agency banking and islamic banking. in order to augment the safety of savings of the predominantly rural clientele, the amendments further include bringing the large tier 4 microfinance institutions that may surpass a set threshold under the regulatory ambit of the bank. we at bank of uganda see the rural challenge fund as another timely and significant initiative that will help cover some of the costs that the financial institutions incur in their endeavor to extend financial services to rural areas. the fund is also expected to motivate the financial institutions to try out new rural focused approaches that they could not undertake single handedly because of the perceived risk. while we welcome this initiative that largely addresses the supply of loanable funds to the rural sector, we must remain mindful of the need to address the issues that constrain rural enterprises like agricultural small holder farmers from accessing formal credit and being profitable. failure of delivery of necessary public goods and services such as quality extension services, market information and rural infrastructure may impede the effectiveness of great innovations like the rural challenge fund. i am personally excited about the rural challenge fund, more so because it compliments government efforts in improving access to credit to transform a predominantly agriculture based - rural sector through among others - the agricultural credit facility ( acf ). i thus encourage eligible financial institutions to take advantage of this great opportunity. thank you very much for listening to me. bis central bankers ’ speeches

are to be made by means of electronic instruments and cashless procedures. a. 2 tax reductions the austerity package entails revenue decreases of €7. 6 billion in 2012, €10. 2 billion in 2013 and €12. 0 billion in 2014. apart from the safeguard clause, the main measures introduce tax reliefs in favour of firms. deductibility of the return on new equity. – among the measures for growth, the decree law introduces an “ aid to economic growth ” modelled on the allowance for corporate equity, i. e. in the form of the deductibility of the normal return on equity, estimated by applying a notional return to new issues of equity. this mechanism makes for greater tax neutrality in the choices of corporate financing, fostering a reinforcement of italian businesses ’ capital structure. the facilitation applies to increases in equity capital with respect to the level at the end of the financial year in course on 31 december 2010. given its incremental nature, the measure can couple moderate losses of revenue with powerful incentive effects and enable firms to undertake more innovative and potentially more productive and remunerative investment projects. consequently it can foster the growth in size of italian firms and impart impetus to new initiatives. the expected reduction in receipts amounts to €1. 0 billion next year, €1. 4 billion in 2013 and €2. 9 billion in 2014. bis central bankers ’ speeches deductibility of irap and reduction in labour costs. – the staff costs subject to the regional tax on productive activities ( irap ) are to be totally deductible from corporate income tax and personal income tax from 2012 onwards, with an estimated decrease in revenue of €1. 5 billion in 2012, €1. 9 billion in 2013 and €2. 0 billion in 2014. furthermore, the deduction from the irap tax base that firms can claim for each new female employee or each new employee under age 35 hired on a permanent contract is increased by €6, 000. by reducing labour costs, these measures could have positive effects on firms ’ competitiveness and the labour market participation of women and young people. in the case of an employee with gross earnings equal to the national accounts average for 2010, the new deductions for workers under 35 and for women constitute a benefit equivalent to 0. 5 per cent of the cost of labour. a. 3 measures affecting expenditure expenditure will be reduced mainly through intervention on pensions and transfers to local government