1 equity bank mfi role in achieving vision 2030. 2 structure of the presentation brief background of...
TRANSCRIPT
1
Equity Bank MFI role in achieving
Vision 2030
2
Structure of the presentation
Brief background of Kenyan economy
Vision 2030 at glance Role of MFI in achieving Vision 2030
Concluding remarks
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Background
Total Area: 582,650 sq Km Population: 34,707,817 Population Density : 60% GDP: 6.3% Inflation Rate: 7.4% More than 50% of Population live
in poverty 80% of the population live in rural
zones
FINANCIAL ACCESS 19% (Formal -Regulated banks), 8%(Formal –Others SACCOs and
MFIs), 35%(Infomal -Accumulated
Savings and Credit Associations) 38% ( Unbanked- no formal or
informal financial products)
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Economic scenario at glance
The economic growth has so far increased from 0.6% to 6.1%
between 2002 to 2006
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VISION
A touch, a guide, an inspiration of the future. “Crystallize focus”
VISION 2030
“A globally competitive and prosperous nation with a high standard
of life by 2030”
How: transform Kenya into an economic powerhouse with asustainable growth rate of over 10% by 2030 thus becoming a
middleincome prosperous country.
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Building blocks for vision 2030
A globally competitive and
Prosperous nation with a high quality of life by 2030
To maintain a sustained economic growth of 10% p.a.
over the next 25 yrs
An issue-based people-
centered, result-
oriented, and accountable democratic
political system
A just and cohesive society
enjoying equitable social development in
a clean and secure
environment
Economic Pillar Social Pillar Political Pillar
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FOCUS SECTORS
Financial Agriculture Tourism ICT – Business process outsourcing
(BPO) Manufacturing Wholesale & retail trade
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SUPPORT INVESTMENTS
Infrastructure
Education
Health
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Kenya's Macroeconomic Environment
2002 2003 2004 2005 2006
Population (Million) 32.2 33.2 34.2 35.1 36.1
Real GDP Growth (!%) 0.5 2.9 5.1 5.8 6.1
Per Capital Income-Current (USD) 408.3 451.9 474.7 544.5 652.7
Gross Domestic Investment (1% of GDP) 15.3 16.4 16.9 16.8
Underlying Inflation (% 2.9 2.7 3.5 5.4 3.9
90 Day T-Bills (discount rate) (%) 8.4 1.4 8.3 8.1 5.7
Months of Import Coverage (Total reserves) 3.3 4.2 3.4 3.3 3.7
Exchange Rate (Kshs/US$) 78.7 75.9 79.3 75.6 69.6
Source: Central Bank of Kenya/Central Bureau ofStatistics
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Economic growth pillar
Envisages economic growth of over 10% p.a. This growth will be achieved through Increased saving and investment across
the board Efficient use of existing labor force
(increased labor productivity) Increased and sustained growth of Micro
and Small Enterprises Supporting agro-businesses Increased access to investment funds
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The role of MFI in economic
growth
Financial institutions’ main role is financial intermediation Financial institutions enhances or facilitates investments through savings or/and loans
Economic growth of 10% p.a. is achievable if MFI become more efficient in their financial allocation business.
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MFI’s role achieving vision 2030
The role of MFIs in achieving Vision 2030 can beunderstood clearly through understanding what theyhave been able to achieve in provision of financial intermediation. The achievements can be classified inseveral categories;
1. Outreach
2. Accessibility
3. Focus client
4. Impact on general financial market 5. People empowerment
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Outreach MFIs have reached previously unbanked
population, enabling them to save. The savings have enabled many people to
build capital for investment. Increased investment results to increased
job opportunities leading to efficient use of human capital.
The increased financial access through MFI will be necessary in attaining Vision 2030.
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Accessibility Breaking geographical and literacy
barriers and taking financial services to the people.
Demystifying banking, easy access, flexible, affordable.
Use of non conventional collateral, including social capital, hence making credit accessible to the majority.
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Focus clients Focus on segments that were hitherto ignored; MSEs.
Moving to rural areas and supporting agriculture is making agribusinesses thrive, becoming more competitive.
Micro and small businesses success drives economic
growth of many countries and are expected to contribute substantially in attainment of Vision 2030.
Efficient supply of funds in agricultural value chain will be vital in attainment of Vision 2030.
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MFI’s impact to general financial
market
Revolutionalised banking, making it a right and not a privilege.
MFI have made financial services more affordable.
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People empowerment MFIs are giving people hope, awakening
them to start charting their own destiny.
MFI are giving people opportunity to build their confidence and dignity out of the hopelessness that results from poverty.
More and more people have started having positive attitude about life and taking self-employment seriously. MFI are facilitating turning their business dreams into reality.
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MFI’s Contribution
MFI will play an important role in achieving Vision2030 if:-
They improve their operational efficiency and themselves becoming commercial entities.
Become more innovative and be able to develop demand driven financial products Increase their outreach and focus on agricultural sector Make their services more affordable and accessible.
