##md will facilitate the growth of government securities by broadening significantly the investor base to retail investors. the second product is m - akiba. this is a critical government initiative, which seeks to increase the public ’ s participation in government securities through the existing mobile - phone bis central bankers ’ speeches money transfer services, and with a low minimum investment amount of us $ 30. the first m - akiba infrastructure bond will be launched shortly as the necessary arrangements are in the final stages, and is expected to mobilize ksh. 5 billion ( about us $ 50 million ). retail investors will be able to register, bid and pay for government securities through the existing mobile platforms. this will provide alternative investment options to retail investors who have long been poorly remunerated especially for their deposits held by banks. these products will be transformational – in addition to promoting financial inclusion, they will facilitate a change in the population ’ s savings culture, and ultimately lead to an increase in national savings. however, as the digital platforms continue to evolve, there are challenges and risks that need to be addressed. it is therefore important that countries continue to share experiences and strengthen partnerships based on best practices to address these challenges. the state of the banking sector in kenya finally, i would be remiss if i did not say a few words about the recent developments in our banking sector. in the main, concerns have been raised following the placing of three banks in receivership, since august 2015. we have underscored that the central bank ’ s actions were necessitated by unique circumstances in each of these banks, and that these were carried out in the interest of the depositors, creditors, and the wider public interest. we have also indicated that the weaknesses revealed by these cases are not systemic and the banking sector remains strong and stable. the capital - adequacy ratio stood at 18. 8 percent in march 2016, well above the statutory minimum of 14. 5 percent. the average liquidity ratio rose to 39. 8 percent in march 2016, above the statutory minimum of 20 percent and higher than 38. 1 percent in december 2015. nevertheless, some challenges remain. for instance, interest rates spread remain very high : the spread between the average commercial banks ’ lending rate and deposit rate stood at 10. 3 percent in march 2016. poor liquidity management and distribution remains a key concern, for which remedial actions are being taken. bank supervision is also being strengthened urgently. the central bank remains committed to

fostering banking system stability and will continue to exercise its supervisory mandate in a fair and even - handed manner. importantly, we have seized the opportunity occasioned by these events and ushered in “ the new normal ” in the banking sector, underpinned by the following : • greater transparency, which is supported by accurate data. • stronger governance, with clear demarcation of responsibilities, greater accountability, fair market conduct, and stronger supervision. • effective business models, aimed at strengthening the resilience of banks, reducing costs, and supporting innovation. in closing, i wish to express our gratitude to the various institutions that have assisted kenya achieve the significant growth and deepening of financial markets. specifically, i wish to recognize ; the world bank, which has supported us through a range of projects, the ifc, the imf, and local stakeholders who have contributed useful ideas for developing the domestic debt market. i look forward to hearing of the experiences from other countries, and learning from your insights on how to resolve the issues raised. thank you. bis central bankers ’ speeches