me to underscore the importance of emerging payment systems to promoting financial inclusion agenda. ladies and gentlemen : the rapid growth of the mobile phone - based money transfer service in kenya beginning with m - pesa, in 2007 has been seen by many as having produced a tectonic shift in kenya ’ s financial landscape with a great impact on financial inclusion. indeed, the rapid adoption and use of mobile money transfer services by some 70 % of the adult population has suggested that there is huge potential for the development of inclusive formal financial services through mobile phones. equally complementing this was banks integration with it and also payments of goods functionality raising in acceptance and reception. notably, the development of innovative and easy - to - use payment systems by financial institutions and other businesses such as mobile phone operators has helped to bis central bankers ’ speeches support rapid growth in e - commerce, in many cases providing consumers with more effective, convenient, and secure ways to purchase an expanding variety of products. ladies and gentlemen : we all know that in the business world, the customer is king. in this regard, i wish to highlight at this point key issues that policy makers may need to address to strengthen consumer confidence in new and emerging payment systems and which may be categorized into five broad areas including : clarity, transparency and completeness in information disclosure ; variability in regulatory and protection regimes ; fraudulent, misleading and deceptive commercial practices ; dispute resolution and redress and security and interoperability. ladies and gentlemen : any success in financial inclusion has to go hand in hand with financial integrity. in this regard, the central bank of kenya has continuously sought to enhance the regulation and supervision of the financial system in order to improve its integrity. indeed, as part of our efforts in ensuring appropriate and effective oversight, we first issued aml guidelines in 2000. these guidelines were later revised in 2006 and are currently in the process of being reviewed to reflect the prevailing international best practice and to align them with the proceeds of crime and anti - money laundering act, 2009 ( pocamla ) as amended and the new act on combating terrorism financing. it is true that over the last 2 years, the central bank has issued regular aml / cft guidelines to financial institutions to further support and enhance the implementation of the proceeds of crime and anti - money laundering act ( pocamla ), 2009. the guidelines have covered the operationalization of the aml act, suspicious transactions reporting, and measures to be adopted by financial institutions to combat the financing of

but above all build a strong financial sector and financial hub of the east african community. • the strength of kenyan banks is now being felt in the region, specifically within the east african community. to facilitate information sharing and supervisory cooperation amongst the central banks, particularly for regional banking groups, the five east african central banks signed a memorandum of understanding early this year. this arrangement will serve to mitigate cross border risks that regional banking groups may pose to the financial sectors of the east african countries. • further, the central bank together with other stakeholders is working on a legal framework that will enable banks to carry out branchless banking through the use of third party agents such as saccos, microfinance institutions and retail outlets in order to enable kenyans to access financial services with ease. it is expected that once the process is complete, the level of access of financial services by kenyans will widen in depth and breadth. we continue to join hands with other actors locally and internationally to promote financial inclusion and access. • in other developments, following the recommendation of a comesa team of experts, the central bank has been picked to host the comesa monetary institute ( cmi ) that will be based at the kenya school of monetary studies. the institute will generate the required knowledge for monetary policy in the comesa region. it will also work to harmonise regulation of financial markets in the region among other issues like a common comesa currency. let me take this opportunity to commend the banking industry on their achievements in opening new economic frontiers and supporting vision 2030. i challenge all banks not only to invest more resources in technology, but to also expand their outreach into the rural areas in the provision of loans. i do agree that the level of economic activity determines the level of loans and credit advanced – but we are slowly evolving from the crisis so economic activity is picking up. i am also aware that in such areas loans and advances are also plagued with inappropriate definition of property rights and problems of enforcement of contracts. these issues are being addressed through information capital and legal reforms. the central bank will continue to partner with banks and other market players to ensure that the sector plays its rightful role in kenya ’ s development agenda. the nic from its 51st year is thus poised to do better in a more incentivized environment. with these very few remarks ladies and gentlemen, it is now my honour and pleasure to wish you all a very pleasant evening and best wishes in your future endeavours as you celebrate the golden jubilee