Equity Bank MFI role in achieving Vision 2030

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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

3
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)

4
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 a
• sustainable growth rate of over 10 by 2030 thus
  becoming a middle
• income 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
Political Pillar
Social Pillar
Economic Pillar
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
To maintain a sustained economic growth of 10
p.a. over the next 25 yrs
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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 of Statistics Source Central Bank of Kenya/Central Bureau of Statistics Source Central Bank of Kenya/Central Bureau of Statistics
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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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MFIs role achieving vision 2030

• The role of MFIs in achieving Vision 2030 can be
• understood clearly through understanding what
  they
• have been able to achieve in provision of
  financial
• intermediation. The achievements can be
  classified in
• several categories
• Outreach
• Accessibility
• Focus client
• Impact on general financial market
• 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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MFIs 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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MFIs Contribution

• MFI will play an important role in achieving
  Vision
• 2030 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.

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