 Okay, so thank you our governor. It was not easy to interrupt or to intervene with the governor But I think thank you it was very very useful What was remarkable about governor's presentation was the similarity between what has transpired in India in Africa You know the the repressive Command financial economy in many countries in Africa was the thing that actually Inspired reforms and then the kinds of reforms that are you actually cataloged are very similar to Africa, so I'm not going to spend much time on African financial sector reforms I'm going kind of shipped the topic a little bit towards what I call African financial development gap and also innovation And simply say that a lot of what has been said in the context of Chile particularly in the concept of India is very similar To you're going to So what I'll do is talk about the what I call the African financial development gap and the some innovative Activities going on in the region to actually be that gap and then I'm going to ask Rose to talk about specific case relating to Kenya Infasa and mobile banking innovation Okay Now if you go back and look at the 50s into early 60s during those independence Wave in Africa most African countries were actually close or ahead of many in Latin American Asia And then the 80s while the rest of the world was moving forward Africa was marching Backwards and there were those actually talking about like tragedy, you know Now what we are witnessing is a growth renaissance It's been going on for the last 20 some years and it's been pretty much sustained Even wizard the global crisis And these performance that you witness in Africa is not accidental It is a result of extensive financial and economic sector reforms and also empowerment of private initiative and and you see Listing of countries with a variety of financial sector reforms very similar to what what you actually saw in India Indian presentation The the the only gap that I see between Africa and India is that the paths They ought to pair off to financial sector reforms have not been as as large in Africa as in India and Suggesting some gaps and I'll be talking about how you actually breed those gaps later now First as a beginner if you look at what we call financial development indicators These boys in but basically if you look at banking sector, you can actually look at two kinds of indicators one is Basically the what I call banking depth the second house would do was intermediation so Looking at again pre-crisis numbers The the the depth measure was 30% Based on GDP for the sub-Saharan Africa, you know compare that with Latin America, which was 50% job and then if you look at Private create provision and financial intermediation the numbers were actually very disappointing Was half the size of other developing countries? so what I did when I saw this number was create a team a research team consisting of Africans and non-Africans and Really look at a closer look at these numbers. So what we decided to do was These are just numbers of which basically suggesting what I just said What we decided to do was? Okay, you know, these numbers are telling something right. This is not that These numbers are low. They're actually low relative to hazard low-income countries. So we wanted to know if These are this is suggesting something about what I call the financial development path in order to do that We did the following That is we looked at we kind of ignored Africa we look at the rest of the world basically low-income countries and Then we came up what I call a financial development benchmark And then we projected that on Africa and then we actually measured that gap in terms of financial development I'm going to skip this part because you have already talked about it and why finance But I'm going to talk about this financial how we measure the financial development gap basically went and you know run a series of regressions based on other low-income countries and on a wide range of well received Determinants of financial development and came up basically was what we call it path as opposed to just simply the level of indicators and and then These are actually the benchmarking Indicators for financial development that we have actually used and then What you see the line is basically financial development path assuming that finance is behaving This way in term based on other low-income countries and you can see that you know most of these African countries are below the line There are some above the line and there was one country which was pretty close to this line and with this Kenya We actually wanted to take a closer look at what's happening to this through to Kenya and so when we actually looked at the Sensitivity of financial development to a variety of measures something that we didn't quite anticipate Actually kind of end up Showing up for us and one is the whole idea of linkage between financial development and population density You think and intuitively that they should be a relationship What was striking is that that sensitivity of financial development to population density is Larger in Africa than anywhere on this planet. It's almost like another this dummy, you know, African financial development dummy in So You know everything that I've said is kind of bad news, right and baby baby challenging news But I wanted to end this With some good news, right? There's good news. Good news out of Africa. Now when we talked about economic growth last time Yeah, the numbers have been very very very impressive But then what's also impressive is that there has been resilience There is diversity of economic performance It's not just in the traditional way where commodity and resource guys were actually growing They're also none commodity none resource countries actually growing and then we have a surge of stock markets Sometimes when I'm I'm actually based in the US won't leave from the US working at the ARC when I mentioned this to some colleagues and The US sometimes they get surprised that there are stock exchanges in Africa. In fact, there are there The numbers actually went up from five or some two decades ago some we have something close to 30 stock exchanges The issue is not that they are not they are not there The issue is not they are not as functional as you would you would expect in terms of best practices And then the whole idea of impact of technology financial technology and in some sense the experience that that that rose is going to talk about of Kenya is related to financial technology and Also regional regional consolidation of a scene and balkanized market. In fact, there is actually growing growing efforts in Consolidating this this market and then this regionalization eventually will lead to global integration of these markets so This is just a slide. It's kind of specific of what I just said and if you look at This is good news And then of course stock market phenomenon And then crisis it, you know 2008 and I think as Raphael said when you are sitting in Chile with this huge global crisis would probably impact Chile adversely it didn't work out that way. It didn't work out that way for Africa either Although the immediate impact if you look at the stock markets Stock exchanges of various African countries the guys which were which were much more integrated with the rest of the world were hit but then The there was a turnaround turn around both in terms of economic performance and also by the way turn around even in terms of Stock market performance so much so that stock markets in Africa began getting media attention. I just took some media there was a Somebody you know that there's an African compositing African There are actually funds trade being traded in in the US. So if you look at these numbers you can see that Right immediately after the the crisis, you know things are actually coming back now I mentioned Kenya here. So what is really happening in Kenya? Role is going to pick up a mobile banking But we are the team that I formed we are particularly interested in this in this bank called equity very innovative very pioneering indigenous bank basically ventured out outside the urban areas went into geographically underserved areas by post-colonial banks like Barclays and so on and basically started as a micro finance and Today This bank is one of the largest in Kenya Not only that it's actually traded on the Nairobi Stock exchange. So our interest was yeah, this is impressive, but has it really made an impact? So we're looking at impact in two ways one is has it enhanced financial access. So this is actually the story of financial access and So we we had Some data but before I do that one of the Features of their models is you know, if you want to open a bank account Rose, I don't know if this has changed but when we saw it Basically what they require is just an ID and a photo You can actually pick that take that picture in the branch Ourself and then look at the other banks, you know the minimum requirement 200 us dollars is very very large for for many for an average Kenyan and then accessibility So basically in local language a lot of people think that's why it is you know 100% spoken in Kenya That's not true. Okay, so there are areas who are actually local language speaking guys and in their branches They actually allow So so so the model is one of coming up with features to make things more accessible So we are fortunate to actually get two data sets one is data we got from branch expansion Data through the center bank and the second is that there is data Collected by financial sector deepening trust in Kenya The first one is going to give us an indication of really what has happened generally in Kenya in terms of banking Expansion and what is the role of equity bank in that expansion and the second is It will give us an indication of the extent to which equity actually has facilitated access to finance or financial inclusion Since I don't have much time. I'm going to jump some of these lies, but I will simply Begins with some stylized fox so we had two data points basically 2006 the survey was done in 2006 in 2009 And in terms of stylized fox all bank groups namely type of banks government banks and foreign banks Basically expanded but in terms of a branching and and the private banks actually did more equity is at the forefront of that so What we did was we did econometrics. So basically we looked at The bank expansion strategy and then also the probability of having a banking account So basically we did a two-stage Analysis and I don't wish to get into econometrics. I don't have enough time, but I'll give you the the basic results So so all kinds of banks including equity bank had greater branch penetration in urban and English-speaking districts, but equity bank differs in at least two dimensions The coefficients associated with rural arid and semi arid are insignificant Where are they actually negative for other banks? Basically, those are other banks are kind of shunning those regions now the the co-vision 2000 year dummy, which is expansion dummy For the for the other bank is like one tenth to one fifth to that of equity bank So that's for the for the first stage branch expansion Analyst that we did and then remember and make I mentioned earlier that one of the things that we found When we look at the Africa in general was that the sensitivity of financial development of population density is larger anywhere then And larger in Africa than anywhere in the world and it turns out if you look at the sensitive population density in the case of Equity banks is actually low. It's actually kind of moving towards that benchmark financial development line that we showed earlier. So So so the so in terms of access We found that There has been improvement in access Engendered by all of these banks, but when we control for those banks equity banks access Effect is actually higher So basically in terms of banking account as well as credit Availability, this is a story of one very innovative bank actually Really enhancing financial inclusion now Let me close this by saying one thing the one other thing that I really like about this bank is Listing in this talk market So people always talk about micro finance informal finance as if it's kind of a solution So I think of micro finance informal finance as a means and Eventually you want to integrate that into formal finance. So what equity bank basically did was integrate micro finance in stock market and In Kenya, of course, by the way, you know everything are that I said sound pretty rosy, but there are also some issues So if you look at these savings accounts, you know over half of the savings accounts are in one bank So there are definitely concerns about bank system stability because if you are actually engaging financial regulation, you're always trading off you're always trading of liberalization privatization with stability of the financial system And then of course by the way We there people are still talking about whether or not this this model is sustainable So the jury is still out and what one fascinating thing that I'm finding is it's not it has not been readily Replicated in other African countries. So so so there's something is going on that we still do not yet understand Now as I said earlier These financial sector reforms that India Indians have done is very much what Africans have done. I think what what I feel is that there are some gaps I think the gaps really has to do with Something that would we don't quite, you know It's kind of simple Sometimes we don't really quite appreciate the role of human cup You know take take a simple bank now I'm talking about a genuine bank which is in the business of information production and appropriate credit risk analysis if you don't have a talent talented financial manpower You're likely you're likely to come up with risk choices, which are distorted either super aggressive or super conservative and hence distorted risk choices are going to derive from Economic performance. So so so there is a capacity issue by the way happen to be in the business of capacity building Sorry, so this is the African economic research Consortium is actually in the business of part. So I think that the whole idea of fostering capacity building is really really important It's not something that we should be taking into account in Coming up with regulatory schemes apart from all this plain vanilla the schemes that we know about couple regulation Micropredential by the way capacity not only of Managing bank but also regulating banks capacity. So it's a financial regulators also need to Know about the intricacies the complexity risk sharing the the multiple functions of finance that we talked about earlier So so although things are kind of moving in the right direction. There are still deeper Gaps in the regulatory scheme and I think that we when we bridge that gap We'll probably get payoffs which are pretty similar to what you guys are doing in there Rose you want to say a couple of words and then we'll open up. Yeah, thank you