Banks eye opportunities in Govt development plan
The Kenya Bankers Association (KBA) has challenged commercial banks to capitalize on the opportunities presented by the government’s development aspirations.
The government through the National Treasury Ministry has already exemplified the role of the private sector by backing the public-private partnerships to drive growth in the country.
Commercial banks vital role in attaining this growth will be in the availing credit to both infrastructural projects and Small and Medium Enterprises (SMEs).
Kenya Bankers Association Chairman Lamin Manjang said the government’s recognition of the role commercial banks play will help foster public-private partnerships.
“Optimizing (commercial banks) involvement in the (development) plan will translate into closer partnerships which would demonstrate the value that commercial banks add to economic growth and development in Kenya,” he said in an opinion piece in the dailies.
Data from the World Bank indicates that Kenya’s infrastructure has a deficit requiring annual expenditures of Sh403 billion (USD 4 billion) which translates to 20 percent of Gross Domestic Product (GDP) per annum.
Mr Manjang however asked government to exercise precaution in the regulation of financial services saying policy roadblocks only serve to curtail growth.
“Policy roadblocks curtail innovation and access to much needed capital and regulations should therefore be addressed sustainably. It is also important to align policy and financial products to attract investments,” Mr Manjang added.
The KBA chair remarks come in the wake of the ensuing debate over the possibility of a repeal of commercial banks’ interest rate capping which has been in place since September 2016.
Commercial banks have been at the fore-front of lobbying for interest caps removal saying the regulation has hurt banks profitability significantly reducing their ability to lend.
The President and the National Treasury have both admitted to the failures of interest rate caps to the economy of the country.
Consequently, the Treasury has announced plans to table a new credit management bill in June which will act as a replacement to commercial bank interest capping.
The new credit management bill is also expected to address other prevailing issues in the financial sector in an effort to bring forth sustainable credit access for both public and private sector stakeholders.
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