Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
Central Bank Rate (CBR) has remained at 18 percent for the last three months, causing interest rates to hit an average high of 30 percent/FILE

Kenya

Raila wants rates pegged at 16pc

Central Bank Rate (CBR) has remained at 18 percent for the last three months, causing interest rates to hit an average high of 30 percent/FILE

NAIROBI, Kenya, Apr 25 – Prime Minster Raila Odinga has urged banks to review their interest rates saying that the public is not comfortable with rates above 16 percent.

The Central Bank Rate (CBR) has remained at 18 percent for the last three months, causing interest rates to hit an average high of 30 percent, following volatile economic environment last year that saw banks raise their rates four times.

Odinga, who was represented by Public Service Minister Dalmas Otieno at this year’s Think Business Banking Awards, said the government was keen to uphold free market principles in the determination of interest rates.

“The government has no business controlling interest rates. But as banks, you must have the interest of your customers at heart and look more towards the sustainability your businesses over the long-term rather than in the short term,” he noted.

Addressing the broader macroeconomic issues afflicting the country to keep interest rates at a reasonable level, Odinga added, was necessary moving forward, through rationalizing government spending and reducing reliance on public borrowing.

“I am reminded that about a year ago, when benchmark interest rates were low and banks were extending credit at as low as 12 percent, nobody was complaining. What we experienced in the last quarter of 2011 when interest rates spiralled to over 20 percent was very chilling and we must not allow it to happen again,” he asserted.

He added that the spread for majority of banks is too high, urging local financial institutions to use self-regulation in closing the gap.

Interest rate spreads remain a key concern, now at 11.3 percent that was reflected in the good returns in capital for most banks that registered 34.6 percent for the industry in 2011.

Meanwhile, Equity Bank was named the best bank in Kenya at the awards on Tuesday night that sized up a wide and competitive field of local and transnational players.

Other category winners included Housing Finance for mortgage financing, Diamond Trust Bank for asset finance, Equity Bank for microfinance and KCB’s Martin Oduor-Otieno as CEO of the year, with Equity’s James Mwangi as the Lifetime Achievement Award recipient.

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...