Kenya now has the third-largest financial sector in sub-Saharan
Africa, the World Bank has said. The global financier, however, says
there is need for further structural reforms to enable the country
achieve its true development potential.
The bank’s
country partnership strategy for Kenya and the government’s Vision 2030
identify access to finance as critical to enhancing the prospects for
growth, regional competitiveness and shared prosperity.
Consequently,
the World Bank Group board of executive directors on Friday approved an
International Development Association credit of $37 million for the
country’s financial sector support project to strengthen the legal,
regulatory and institutional environment.
The initiative is aimed at helping Kenya improve financial stability and increase affordable and long-term financing.
“Kenya’s financial sector is the third-largest in sub-Saharan Africa and it makes a significant contribution to economic growth and job creation,” said World Bank Country Director for Kenya Diarietou Gaye.
“Kenya’s financial sector is the third-largest in sub-Saharan Africa and it makes a significant contribution to economic growth and job creation,” said World Bank Country Director for Kenya Diarietou Gaye.
“The
opportunity for Kenya now is to transform the financial sector to
provide more affordable and longer term credit to contribute effectively
to growth and shared prosperity.”
FINANCIAL ACCESS
The
World Bank says it will continue to support efforts to increase
financial access to improve the environment for private investment,
which plays a critical role in Kenya’s development.
The
new programme will build on reforms that were supported by the
financial and legal sector technical assistance project, which helped
strengthen Kenya’s financial sector in the past decade.
The
critical need now is to consolidate these gains by addressing the
remaining gaps and weaknesses in the financial markets as they relate to
long-term financing needs of Kenya’s development agenda.
“The
new facility will also facilitate access to and reduce the cost of
finance, which are identified as constraints to business growth and job
creation,” said senior financial sector specialist and task team leader
Smita Wagh.
“Stronger policy, regulatory environment
and market infrastructure are needed to support the development,
efficiency and integrity of the financial market.”
The
programme will focus on banks, insurance and pension schemes through a
more targeted approach that supports solutions to specific constraints
that curtail economic growth and job creation in the private sector.
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