NAIROBI, Kenya, Aug 13- Former President Mwai Kibaki has urged local banks to develop new models of lending that will encourage more Kenyans to embrace their services and accelerate the country’s economic growth.
He said banks should lower the cost of borrowing for more Kenyans to access financial capital adding that this would translate into growth, modernization and development of the economy country.
The former president said banks also have the mandate to provide information related to the role they play as economic enablers.
“The lure of lending traders is in the quick return on borrowed capital. But lending for industrial development which holds the promise for mass production and employment, requires both long-term credit and lower interest regime, among others,” the former head of state noted.
Acknowledging the various innovative financial services spearheaded in the country such as mobile phone banking, internet banking, credit information sharing and agent banking, Kibaki said the gains should now lead to lower cost of banking services.
He was speaking during the Kenya Bankers Association (KBA) 51st anniversary at a Nairobi hotel on Tuesday.
The banking umbrella body also took the opportunity to bid him farewell for what they termed as an instrumental role that he played in fostering the unprecedented economic transformation in the country during his tenure.
Kibaki urged the banking sector to cooperate with the government to ensure that development policies and efforts in the country yield the intended impacts.
“On the road to Vision 2030 and with our new-found mineral resources, our banking sector ought to move towards supporting inclusive economic growth based on mass wealth creation across the entire nation and the East African region,” he emphasized.
To play this key role, the former president said the country must rethink the current banking policy, which he said, is a critical intersection between government, the banking sector and citizens.
On his part Central Bank governor professor Njuguna Ndung’u called on the banks to follow regulations with aim of growing the sector and protecting and attracting more customers to the sector.
“More remains to be done to ensure the cost of banking services and products is reduced. We have built strong institution and deposit insurance to ensure safety of deposits. But we now need to work on lowering costs,” Ndung’u said.