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Kenya to deepen capital markets and reduce public debts: Official

NAIROBI (Xinhua) -- Kenya plans to deepen its capital markets to reduce its public debts, an official said on Tuesday.

Paul Muthaura, chief executive officer of capital markets authority (CMA), told journalists in Nairobi that a well developed capital market will help to reduce both domestic and external borrowing by government.

"Capital markets offer a long term market risk financing options that be used to fund public projects and reduce government reliance on borrowing," Muthaura said during the launch of the capital markets university challenge.

The university challenge hopes to facilitate the increase of knowledge and uptake of capital markets products and opportunities by up and coming generations.

Muthaura said the real objective is to inculcate a culture of savings and investments amongst the youth and to build a growing legion of ambassadors for the role of the capital markets in national growth and transformation.

The CMA plans to rollout an education and sensitization campaign so that more policy makers in government can turn to capital markets to raise funds for public projects.

Muthaura said that increased use of capital markets for public projects has numerous benefits to the economy as the government will avoid competing with the private sector for loans from financial institutions.

One of the tools that the capital markets regulator plans to use to increase uptake of capital market products is technology.

The CEO said that while Kenya still enjoys its stature as a hub of innovation, the country’s capital markets are yet to fully utilize the opportunity presented by financial technology (fintech) innovations to push capital market activity to the next level by broadening product and service offerings, deepening market participation and liquidity, and driving transformative economic development.

"Kenya therefore stands to greatly benefit from fintech innovation especially given that the proportion of Kenya’s youth to the population is among the highest globally, presenting the economy with a vibrant competitive advantage," he added.

He observed that technological innovation is becoming a major economic and social development accelerator on the African continent.

"In this regard, the CMA has prioritized efforts towards the establishment of a Regulatory Sandbox to support innovation and development of new products and services," Muthaura noted.

He noted that supporting fintech innovation is in full alignment with the 10-year Capital Market Master Plan’s rationale to stimulate innovation, to broaden product and service offerings, deepen market participation and liquidity, and drive transformative economic development.



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