NAIROBI, Kenya, May 25 – Banking services may get cheaper as more Kenyans get access to the service, Central Bank of Kenya (CBK) Governor Professor Njunguna Ndungu said on Monday.
While revealing that the number of bank accounts in the country has almost tripled over the past three years as lenders cut charges, Prof Njuguna noted that there is a hugely untapped potential in the industry
He said the number of accounts increased to 6.4 million from 2.3 million three years ago.
“The subscribers of mobile phones is slightly over 11 million, and its still growing which means there is huge potential for bringing the unbanked on board and once we do this we will reduce the unit cost,” Professor Ndungu noted.
The CBK boss attributed the increase in bank account numbers to a reduction in the minimum amount needed to open an account and the cutting fees on the cost of maintaining them.
Speaking at the opening of a mobile banking conference in Nairobi, Prof Ndungu pointed out that it was important to note that mobile phone transfer is not an alternative to bank accounts.
“Mobile banking is a service that facilitates national payments and not an alternative to accounts. We want to make sure that this conference adds value in terms of how mobile banking innovations can also be complemented by these new technologies,” he reiterated.
Prof Ndungu said rules are now being drafted that will allow lenders to expand into mobile-phone banking, and further help reduce the number of Kenyans without a bank account.
However speaking at the same forum, Equity Bank Chief Executive Dr James Mwangi raised concern on the slow pace of regulation to suit the fast rate of innovation.
“Is it possible for Kenya to change the maxim from ‘if it’s not expressly allowed in law, don’t do it’ to a new maxim that states ‘if it’s not expressly prohibited do it’, which should inspire more innovations.”
Dr Mwangi noted that it is difficult for regulators to anticipate innovation to be able to come up with necessary legal framework.
Meanwhile, Finance Minister Uhuru Kenyatta said his ministry is doing all possible to ensure that the legislative regime within the country is reflective of the on-going developments in the banking sector.
“For this reason, we have amended the Central Bank of Kenya Act to give the bank the mandate to formulate and implement such policies as best to promote the establishment, regulation and supervision of effective payment, clearing and settlement systems,” Mr Kenyatta said.