sheila m ’ mbijjewe : launch of the 2016 finaccess household survey speech by ms sheila m ’ mbijjewe, deputy governor of the central bank of kenya, at the launch of the 2016 finaccess household survey, nairobi, 18 february 2016. * * * 1. i am delighted and honoured to join you today at this launch of the key findings of the 2016 finaccess household survey that also marks the 10th anniversary of the finaccess surveys in kenya. 2. policy goal : the creation of a vibrant, efficient, stable and globally competitive and inclusive financial system to drive savings and investments necessary to achieve our development agenda as outlined in kenya ’ s vision 2030 is crucial. • there cannot be meaningful financial sector development if finance is not accessible and inclusive. • financial inclusion in terms of access, usage, quality and welfare remains one of the priority areas for the government. 3. financial inclusion landscape : i am pleased to be part of this financial inclusion agenda of improving the measurement, understanding, tracking progress and its dynamics overtime. this has been done mainly through undertaking finaccess suite of surveys since 2006. 4. key findings : the results we are releasing today reflect developments in the wider economy, infrastructural facilities, technological innovations, financial sector developments, policy and regulatory reforms as well as financial markets innovations. i am delighted to announce that kenya has made a lot of progress towards the kenya vision 2030 financial sector development agenda. in terms of financial inclusion, we have far exceeded the government target to increase the proportion of the population with access to finance to over 70 % by 2018 under the second medium term plan, 2013 – 2018. • the proportion of adult population using formal financial services rose to 75. 3 % in 2016. • the rural - urban formal financial access gap has narrowed since 2006. • kenyans are increasingly using a combinations of a variety of financial services providers and new innovations reflecting the importance of a diversified financial system with 59. 7 % of the adult population using two or more types of financial services providers compared with 18. 8 % in 2006. bis central bankers ’ speeches 5. there is need to foster appropriate and proportional regulation and supervision of the different financial services providers to enhance access to a broader mix of providers and products that meet the needs of different consumers. with this growing demand from consumers for a diverse mix of products and innovations, the financial sector requires an enabling environment to foster innovations to the changing

informal remittances channels to migrate to the use of this reliable, albeit convenient platform to send money home. ladies and gentlemen, in view of the important role of the remittances in our economy, an overriding policy objective for the central bank is to lower costs through competition facilitated by the entry of international money transfer services providers. this will enhance service delivery and enable users of such services obtain competitive remittances rates at substantially reduced unit costs. in this regard, central bank has issued and continues to issue permits to all applicants seeking to enter the international money transfer services market under the legal framework spelt out in the cbk act section 33 a, subject to meeting the set conditions. the safaricom mobile based international money transfer service has been granted with a permit pursuant to this policy objective. at this juncture, i would like to reiterate that while the central bank welcomes innovative products, it evaluates all such products to ensure safety and efficiency concerns are adequately addressed. the central bank has the necessary capacity to properly evaluate and appraise technology driven financial services to ensure they meet international standards. services that involve partnerships with commercial banks have to adhere to the existing prudential and statutory banking sector requirements. we will work closely with commercial banks and other service providers to increase awareness and enlarge the frontier of services. the central bank is also cognizant of the fact that international remittances platforms could be used as money laundering channels. part of our evaluation therefore involves subjecting applicants to a through scrutiny of their aml compliances programmes not only in kenya, but also in the sending jurisdictions. in this regard record keeping and “ kyc ” requirements must be adhered to as part of the approval conditionality. ladies and gentlemen, the subject of migrant worker remittances and their socio economic significance both for the sending and receiving countries has become a popular topic for governments, payment systems experts and other public policy makers. international remittances bring with them substantial welfare gains to the receiving countries and have huge developmental potential. the world bank estimates that recorded remittances by some 200 million migrants from developing countries reached us $ 283 billion in 2008, up from us $ 265 billion in 2007, while unrecorded flows through informal channels could even be higher. as a share of gdp, remittances constitute about 2 % of gdp. these numbers are almost equivalent to the foreign direct investment ( fdi ) flows, and may