Money lending institutions in the country have been urged to lower interest rates in order to spur growth.
Speaking at the Barclays Bank’s Nakuru Open Golf Tournament cocktail dinner at a Nakuru hotel on Friday evening, Nakuru county CeC member for Youth, Gender, Culture, Sports and Social Welfare Halima Gababa said such pricing adjustments would win more clients as well as raise banks’ profit margins.
“The high interest rates on loans and deposits are keeping away youth and women who formed groups to access finances to promote their businesses. There is therefore need for the banks to further lower their interest rates to accommodate these groups,” she said.
She further called on banks to fully embrace group lending schemes with better incentives to help empower small communities who have come together.
The CeC also took a swipe at banks that she said hand lost touch with the common man thus creating an impression that it was for the rich only.
She added that counties had much to do with banking institutions through various empowerment programs and would work well if the banks considered various factors rhyming with SMEs.
The bank’s chief financial officer Yusuf Omari said the institution was a universal bank and was working to change the perception that it is for the rich.
“When I look at the makeup of our balance sheet and income statement, we have 50% being retail customer, 25% small micro enterprises and 25% being corporate. We bank for all levels,” he said.
He added that Barclays Bank was the first institution to embrace group lending through ‘table banking’ but delayed in responding to the opportunity consequently losing the concept to another bank.
“We are going to use technology. We don’t want these people to come to our banking halls. We will serve them at the comfort of their meeting places or homes. That’s our commitment,” Omari said.
In September 2016, President Uhuru Kenyatta capped banks interest rates but small and medium enterprises continued to face challenges in accessing credit.