More Kenyans can now own homes
Mr Kenyatta increased the threshold of core capital that banks are allowed to invest in mortgage finance from 25 per cent to 40 per cent to enable more Kenyans to own homes. Photo/FILE
The Kenyan Government enhanced mortgage financing and opened up the insurance business to members of the East African Community.
Finance minister Uhuru Kenyatta also said the law would be amended to accommodate Islamic banking, which has been operating since 2007.
Mr Kenyatta increased the threshold of core capital that banks are allowed to invest in mortgage finance from 25 per cent to 40 per cent to enable more Kenyans to own homes.
He said the Microfinance Act will be amended to deepen agency banking by facilitating third party agents by deposit-taking MFIs.
The Banking Act, the minister said, will also be amended to allow the Central Bank of Kenya to reveal information on tax evasion, fraud, and criminal activity that they encounter in their surveillance of foreign exchange bureaus.
He also directed the CBK and the Kenya Revenue Authority to carry out a comprehensive audit of all bureaus in the country and submit a report by the end of September.
The Insurance Act will be amended to hold the directors of insurance companies liable for failure to submit members’ dues in statutory contributions.
A structured compensation scheme similar to that under the Workers Injury Benefit Act, capped at Sh3 million, will be introduced for motor vehicle third party risks.
The Deposit Protection Fund Board will be allowed to hold and sell unrealised securities after the winding up of an institution, while the Central Bank will be mandated to take prompt action to enhance stability in the banking sector.
In last year’s Budget, the minister introduced reforms in banking to accommodate agent banking through other financial institutions to increase the banked population that is currently estimated at 38 per cent.
However, savings and credit cooperative societies (saccos), rejected the move, fearing that this model would adversely affect their businesses.
Last week, Sacco Savings Regulatory Authority chairman Peter Gakunu said the concerns were accommodated in the regulations to be gazetted by the AG soon.
Banks were concerned about the high cost of collateral and had approached the government to find ways of having it contained.
