President Uhuru Kenyatta has urged commercial banks to work together with the Central Bank and other stakeholders to provide affordable credit to Kenyans.
The President was speaking during the 50th CBK anniversary celebrations at the National Museums of Kenya in Nairobi.
The Head of State expressed concern that interest rates in the country have remained higher than in comparable middle-income economies despite the deepening of financial markets and the recent introduction of credit-information sharing.
“Consumers are yet to benefit from reduced cost of credit. The concerns led to recent legislation capping commercial bank interest rates,” Uhuru indicated.
The President in August assented the Banking Amendment Bill 2015 into law. He assented after listening to the public frustrations centered on interest rates and the cost of credit.
“Since receiving this Bill, I have consulted widely and it is clear to me from those consultations that Kenyans are disappointed and frustrated with the lack of sensitivity by the financial sector, particularly banks. These frustrations are centred around the cost of credit and the applicable interest rates on their hard-earned deposits. I share these concerns,” Uhuru reiterated.
The Head of State however noted of the difficulties ahead, but said the government would eventually implement the new law.
“We will closely monitor these difficulties, particularly as they relate to the most vulnerable segments of our population and also accelerate other reform measures necessary to reduce the cost of credit and thereby create the opportunities that will move our economy to greater prosperity,” he said
The National Treasury, the Central Bank of Kenya and the banks were opposed to the capping of interest rates arguing it would be counterproductive to the economy.
The President reiterated that the Government would find necessary measures to reduce the cost of credit.