Kenya, Singapore in deal to collaborate on innovation

Kenya, Singapore in deal to collaborate on innovation

Kenya and Singapore have, through their respective Central Banks arrived at an understanding allowing the two countries to collaborate on innovation.

In a Memorandum of Understanding (MOU) signed on Monday, July 15, 2019, the two states are expected to among other activities; the co-development of foundational infrastructure on identity, data and electronic Know Your Customer (KYC) procedures.

Speaking during the MOU signing at the innagural Afro-Asian Fintech Festival in Nairobi, Central Bank of Kenya (CBK) Governor Patrick Njoroge said he expects the collaboration to lay the building blocks for the push to universal financial inclusion.

“Collaboration offers the best chance for creating an effective eco-system for financial innovation. In 2007, Africa became the cradle of fintech with the launch of Mpesa which has continued to spur additional innovation,” he said.

On his part, Treasury Cabinet Secretary Henry Rotich expects the collaborative venture to provide for avenues to drive down transactional costs to the use of financial services.

“We still have a job to do in reducing the cost of providing financial services and in turn encourage Kenyans to save, invest, borrow, create wealth and use financial services,” he added.

Innovation has been the brains behind the improved financial penetration in the country with the percentage of unreached Kenyans hitting a low 11 percent according to the 2019 FinAcess Report published earlier this year.

Mobile Money accounts for instance now have a share of 79 percent of the financial landscape in the country rivaling the place of traditional banks whose hold in the system has been on the decline.

Further, innovations around digital credit has been on the rise with digital app loans taking up a share of eight percent in 2019 from a non-existent position five years ago.

The Financial and Insurance sector has remained vibrant under the wave of innovation and in spite of an engaged handbrake on growth in the form of dwarfed credit flows and an overall decline in demand.

The sector’s output rose to Ksh.534.9 billion in 2019, an equivalent six percent of Gross Domestic Product (GDP) according to the 2019 Kenya National Bureau of Statistics (KNBS) Economic Survey.

President Uhuru Kenyatta, who graced the opening of the fintech festival, co-hosted by the Monetary Authority of Singapore (MAS) expects the formal collaboration between the pair of states to provide for new avenues for growth and engagement to include improved trade between the two partner states.

“The MOU sets the foundation for joint innovation projects and the application of emerging digital technologies. This projects will enhance the digital infrastructure in both countries and catalyze trade and investments between Asia and Africa,” said President Kenyatta.