Financial Sector Development & Regionalization Project I (FSDRP I)

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The objective of the First Phase of the Financial Sector Development and Regionalization Project is to establish the foundation for financial sector integration among East African Community (EAC) partner states. There are six components to the project. The first component of the project is financial inclusion and strengthening market participants. This will leverage the establishment of a single market and the benefits of scale associated with regionalization to make a broader range of formal financial services/products available to a more diversified client profile. The second component of the project is harmonization of financial laws and regulations. This will move towards legal and regulatory harmonization in banking and accounting, securities markets, insurance, pensions, investment funds critical to achieve an effective functioning of a single market in financial services via EAC acts. The third component of the project is mutual recognition of supervisory agencies. This will support the establishment of a system in which a financial institution or market intermediary licensed by the supervisory authority in one partner state will be allowed to operate in all partner states upon simple notification to the supervisory authority of the host state. The fourth component of the project is integration of financial market infrastructure. This will support the establishment of an efficient market infrastructure, compatible at the regional level. The fifth component of the project is development of the regional bond market. This will support the development of the Government bond market in each partner states, and the sixth component of the project is capacity building, it will strengthen capacity at both the regional and the national level to ensure that the integrated market functions effectively and that all economic agents in the regional area aware of and able to realize the benefits from the process of integration.