THE Kenyan economy is expected to rise to 5.6 per cent by the end of this financial year, National Treasury Secretary Henry Rotich has said.

Last year, the growth reached 4.6 per cent up from 1.6 per cent in the year 2008 after it went drastically due to the 2007 post election violence.

It has since been growing gradually due to a number of factors among them the success in containing the country's inflation, raising the foreign reserves and improving the public debt profile.

In a speech read on his behalf by Central Bank of Kenya governor Njuguna Ndungu during the official opening of the annual Association of African Development Finance Institution forum at Serena hotel in Mombasa, Rotich said Kenya has been doing well economically.

"This growth has been as a result of efforts to anchor economic stability through sound fiscal and monetary policies and market oriented structural reforms," he said.

He said they plan to have growth reach seven per cent mark during the second medium term plan of the Millennium Development Goals and double the digit by the end of the plan in 2017.

The Cabinet Secretary said about 67 per cent of the Kenyan population has access to formal finance, thereby making millions of Kenyans play a major role in the economic growth.

"The financial services sector has developed significantly in recent years buoyed by financial innovation and sound regulation and supervision," he said.

Meanwhile, he urged the development financial institutions to come up with innovative ways in resource mobilizations as over the years they have been dependant on government funding and support.

Weak financial conditions have also made it difficult for some DFIs to mobilise resources from the market or from development partners without guarantees fromg overnment.

They have lost the market monopoly position for medium and long-term credit following emergence of commercial banks and other non-bank financial institutions as strong competitors that are able to offer innovative financial product.

DFIs were once strong financial and development institutions in the '80s before commercial banks and other financial institutions invaded the market.

According to Rotich, these institutions will need to come up with innovative product that can rival other products from banks and financial institutions.

He urged them to operate freely and independent because the poor corporate governance and political interference in the past left them with weak management and demoralized staff.