The Government is finalizing recommendations on ways of reducing the high interest rates currently charged by commercial banks and other financial institutions, Deputy President William Ruto has said.
Mr. Ruto said the report will be presented to the private sector and other interested groups for deliberations with a view to reaching an amicable solution.
“We are concluding our recommendations so that we can share with the private sector in a move aimed at attaining a solution to the high interest rates,” said Mr. Ruto.
The Deputy President wondered why financial institutions in the country charged as high as 20 percent interest, saying the situation has denied many Kenyans the opportunity to engage in development.
To transform the financial sector, the Deputy President said, there was need to make credit available for Kenyans to engage in meaningful projects aimed at uplifting their living standards.
Speaking during unveiling of the Nairobi Securities Exchange (NSE) logo and building in Westlands, Nairobi, the Deputy President said the high interest rates could be reduced to single digits if efforts are made collectively to address the situation.
“It is possible to reduce the rates to a single digit in the next year if all of us combine our efforts in addressing this.”
The Deputy President said it was difficult for the Government to attain the double-digit economic growth if the issue was not resolved.
He said unless commercial banks reduced the rates, many Kenyans will not have the opportunity to engage in any meaningful development activities.
Mr. Ruto said efforts were being made to correct the situation to allow as many people as possible access credit facilities to engage in business activities, which can empower them economically.
The Deputy President said the Government plans to stop borrowing from the local market to allow other players to access the funds.
Chairman of the NSE Eddy Njoroge said his board has approved Sh 250 million to upgrade its infrastructure to better serve the market as well as support introduction of new markets.
Investment Secretary Esther Koimett said the National Treasury was committed to ensuring conducive environment for NSE to operate.
Others who addressed the meeting included Peter Mwangi, Chief Executive NSE and Kung’u Gatabaki, chairman CMA among others.
April 7th, 2014 KAINO/DPPS