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Kenya School of Monetary Studies

Strengthening of Kenya's School of Monetary Studies

The project delivered a more effective e-banking service to poor communities in Kenya as part of implementing Vision 2030.

Country: Kenya
Host: Kenya School of Monetary Studies / Central Bank of Kenya
Start date: 01/02/2012
End date: 01/02/2015 
Policy area: Economic Development, and Governance and Natural Resources
Policy experts: Cheryl Bruce and Tony Ming
Project Manager: Tim Newman

Background

The Kenya School of Monetary Studies (KSMS) was established in 1997 to address the training needs of the banking sector in Kenya and improve the performance and quality of service and standards in the financial sector.

E-banking, at the time, was relatively new in Kenya, and was identified as a strategy of enhancing banking services to poor communities in Kenya and therefore of fighting poverty. The explosion of mobile banking through mobile money transfers e.g. through Safaricom’s M-Mpesa, Zain meant that there was a dire need to develop the country’s capacity to deal with these new methods of banking. However, the KSMS did not have the human capacity to introduce a framework for a sound e-banking training and curriculum in their school.

The KSMS therefore requested support to address the need for capacity building in the area of e-banking. 

Goal

The goal of the project was the delivery of a more effective, citizen centred e-banking service through improved e-banking skills within the Kenyan banking sector. 

Impact

The project resulted in KSMS being able to offer relevant, high quality e-banking training to the banking sector which in turn will lead to improved e-banking services to the citizens of Kenya. The institutional linkages established will enable KSMS to maintain quality, expertise and knowledge in the field of e-banking on an on-going basis. Ultimately this project will assist reaching the under banked communities in Kenya as part of implementing Vision 2030.

Ebanking (mobile banking) is a field in which Kenya is now a genuine world leader. This has been recognised by the Central Bank who are now working with the Kenya School of Monetary Studies (KSMS) to develop the field as much as possible. This is having a dramatic effect on the economic opportunities for the rural poor who have traditionally had little or no access to banking services. This is illustrated by that fact that while less than 40% of adult Kenyans have bank accounts, over 75% have adopted mobile banking, thereby gaining access to savings options (and earning interest), secure payments and short term credit facilities. 

Outputs

The project addressed the problem of lack of capacity within the KSMS to introduce a framework for sound e-banking training and curricula. It also addressed the capacity gap regarding strategic and key issues on wider e-banking policies and practice, as well as collaboration with appropriate international financial management institutions abroad.

Finally, the project contributed to strengthening monitoring and regulatory capacity of the Central Bank of Kenya on e-banking.

The project has delivered the following achievements:

  • The production of the first draft of the e-banking Master Systems Rules and Regulations.
  • The establishment of the Institute for Digital Financial Inclusion and the respective centres (Oracle, SAS, Mobile Banking and Bloomberg).
  • The recruitment of two technical leads for the Mobile Banking Lab and the SAS Analystics Laboratory.
  • Two KSMS employees were trained and equipped with e-banking skills.
  • The project contributed to the mobile money regulations. These regulations are for the provision of payment services in Kenya in line with Section 31 of the National Payment System Act, 2011 and are focused on Anti-money Laundering, Provision of Electronic Retail Transfers, Designation of a Payment Instruments Designation of a Payment System, Electronic money.
  • The project saw the rollout of the second phase of the Tangaza cashless payment system in support of e-banking. This is based on mobile and card payment system.
  • The CFTC expert supervised five Masters in Banking and Finance e-banking dissertations.
  • The CFTC expert participated and presented in 37 international and national e-banking workshops and conferences.