NAIROBI, Kenya Jun 22 – The Government will soon be implementing measures aimed at bringing down the cost of capital and improving access to financial services.
Speaking on Monday during the Silver jubilee celebrations of Family Bank of Kenya, President Mwai Kibaki said following the implementation of regulations to facilitate credit information sharing earlier this year, the Central Bank of Kenya would license Credit Reference Bureaus to gather credit information from banks that will facilitate lending decisions.
“The cost of credit remains beyond the reach of many Kenyans. Thus, besides improving access to financial services, there is need to explore ways and means of bringing down the cost of capital,” he said.
President Kibaki said the intended proposal was possible because of Microfinance Act of 2008 which became operational and provides for both National and Community Deposit Taking Microfinance Institution
“The Government and, indeed, the public expect these institutions to serve especially the rural and peri-urban areas that have previously been inadequately served by the banking sector,” he said.
The move will now see banks make reference to an individual’s credit history which will serve as the collateral required for loan application.
The president underscored the need to strengthen microfinance institutions and commercial banks in the country as a source of financial resources needed for growth of the economy.
“In Kenya this is one sector that has helped in the attainment of our development aspirations, and will continue to play a pivotal role in the realization of vision twenty thirty.”
At the same time, president Kibaki directed the Central Bank of Kenya to enhance its efforts of providing information on the cost of banking services to Kenyans.
“This information should be delivered in formats that can be easily understood and used for comparison of the pricing of the different banking products and services,” he argued.
He urged Kenyans to take advantage of the availed information so that they could make an informed decision when choosing a competitive bank.
In an effort to reach out to the vast number of the un-banked population the president encouraged banks to make use of innovative technology.
“The sector needs to do much more to reach Kenyans who still do not use banks. In this regard, banks should exploit technology to reach more Kenyans in a cost effective way.”
Speaking during the celebrations, Family Bank chairman Titus Muya indicated the bank could be soon rolling out new branches in the east African community.
Currently the bank has an asset base in excess of Sh11 billion with a deposit base of Sh 8.5 billion and a network of fifty branches country wide.
Mr. Muya said the bank still intends to list on the Nairobi stock exchange, but the process was put on hold last year during the height of the global economic melt down.
“At the time we wanted to list the environment was not favorable but we will continue with our plans as soon as things stabilize,” Mr. Muya explained.