which a decision is made on the monetary policy stance. This is done, mainly, by setting the central bank rate which is expected to signal and coordinate other rates in the market with a view to stabilizing the economy. 2. The development of the infrastructure bond program The infrastructure bond targets infrastructure projects in each fiscal year under the public investment program. In collaboration with the treasury the CBK issued 20,25and 30 years bonds respectively. The 30 year bond is specifically intended to support the buildup of nation’s savings as envisaged in vision 2030. The proceeds are used to develop social and economic infrastructure including the implementation of the new constitution. 3. Deposit insurance mechanism reform The CBK spearheaded the development and transition of Kenya deposit insurance system through the enactment of the Kenya deposit insurance act of 2012. The government through financial regulators provides some form of insurance to cushion depositors and investors from
any financial loss in case of failure. The central bank of Kenya for instance through depositors’ protection fund assures commercial bank depositors Ksh 100000 per account for each depositor in case of failure. 4. Licensing of deposit taking microfinance institutions Depository institutions are those that allow market regulators to access deposits from surplus economic units and provide credit to deficit economic units. The reform`s aim was to serve the lower end of the Kenyan population particularly small and micro enterprises and low income populations previously locked out of the formal financial sector. 5. Entrenching credit information sharing through licensing credit reference bureaus This is to solve the problems of moral hazard and adverse selection and also the lack of physical collateral. Lenders are able to obtain a comprehensive credit history of the borrowers at a fairly reasonable cost hence expanding access to credits.
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