NAIROBI, Kenya, May 26 – The use of modern technological advances in the financial services sector will help to transform Kenya into a 24-hour economy, where financial transactions are not limited to the day-time, Vice President Kalonzo Musyoka said on Monday.
Mr Musyoka noted that the mobile banking system helps the government integrate more Kenyans into the formal banking sector, thus creating opportunities for economic activities.
“Our experience with mobile banking services is that these products have the capability of penetrating the remote areas of the country, where traditional banking service providers may not be available,” he added.
However, the Vice President said that there is need for a review of policies to accommodate the development of mobile banking and other upcoming innovations and modern technology in the financial sector.
The VP made the remarks during a dinner in honour of participants in the ongoing conference on mobile banking ‘M-Banking 2009, Balancing Regulation and Innovation’, which is being held at the Kenya School of Monetary Studies in Nairobi.
The two-day conference, co-hosted by the Centre of Emerging Market Enterprises at the Fletcher School, Tufts University and the Kenya Monetary Studies in conjunction with the Central Bank of Kenya(CBK), had participants drawn from international and domestic practitioners, regulators and academia.
The VP said that there is need to explore more avenues to provide alternatives for clients to choose from the financial transactions thus encouraging healthy competition among service providers.
Mr Musyoka added that time has come for Kenyans to change the perception that banking services was a preserve for relatively affluent and well–to–do individuals and instead embrace mobile banking that has the potential to cater for people of all status.
He appealed to players in the Information and Communications Technology sector to continue coming up with enhanced technology that could supplement the government’s efforts in increasing access to mobile banking services.
The Vice President commended the efforts by CBK to cater for the un-banked by bringing Microfinance Institutions into its regulatory framework, thus enhancing public confidence in the institution and its products.
“It is my hope that mobile banking will be extensively adopted by microfinance institutions so as to improve the scope of services available,” he said.
Mr Musyoka appealed for the support of institutions that are ready to embrace low-cost models of banking by adopting mechanisms that can network banks, microfinance institutions, postal systems and mobile phone service providers.
He commended CBK for working together with other central banks in the region to harmonise and integrate the national payment system, saying the move will help Kenya and the region at large to integrate with the rest of the world and participate fully in the global economy.
CBK Governor Prof Njuguna Ndungu said that there is need to provide appropriate infrastructure that would enhance access to financial services, as well as provide a proper regulatory framework for new innovations.