Cut interest rates, Ruto urges lenders

Commercial banks and other lenders have been asked to cut interest rates to enable more Kenyans to borrow.

The current lending rates are prohibitive and scare away potential borrowers, especially women, the youth and other vulnerable groups, Deputy President William Ruto said on Friday.

“Women and other groups should be given an opportunity to access cheap loans. I speak very passionately about interest rates and I hope banks can listen and make credit affordable,” he said.

Mr Ruto made the remarks during the Joyful Women Organisation's thanksgiving dinner and fundraiser held at Mr Ruto's Karen residence.

He added that the sky-high borrowing charges had not only locked out borrowers and denied them an opportunity to expand their businesses but were also stifling growth.

LACK OF COLLATERAL

If the trend was not addressed, he noted, it may complicate the government’s efforts to fight poverty in the country. 

“There are millions of people who have been locked out from exercising their potential because they cannot access credit to work with,” he said.

Whereas corporates had the ability to negotiate for cheaper loans, individuals, especially the poor, were completely locked out because they lacked collateral.

Mr Ruto said efforts are in the pipeline to expand the financial market, especially with institutions that can offer cheaper loans, citing the Uwezo Fund, which offers interest-free loans to women, the youth and persons with disabilities. He said that the government would support organisations that are keen on transforming the financial industry. (DPPS)