NAIROBI, Kenya, March 7 – Deputy President William Ruto has vowed to initiate a diaspora bond that will enable Kenyans living abroad to lend money to the government at an interest rate of seven percent.
DP Ruto, who was addressing Kenyans in London, United Kingdom, noted that the fund will foster a win-win situation where Kenyans will get a return on investment while the Government enabled to finance its development activities.
“We will make it possible so that instead of keeping money at the bank here(abroad) and getting zero interest, we can give you 7 percent interest at home, by having a diaspora bond where you can put your money, you will help the government with money to run programs,” he said during a forum after his arrival in London where he was received by officials from the Kenyan High Commission led by High Commissioners Manoah Esipisu.
The Diaspora fund, he said, will be an addition to local borrowing which accounts for the highest chunk of borrowing, mainly from banks that receive billions in profit.
He decried that individual Kenyans don’t majorly benefit directly from government lending since they receive 1-2 percent return from banks who in turn lend to the Government at 8 percent.
“Fifty percent of borrowing is local, the biggest beneficiaries are Kenyan banks- almost eighty percent who make billions of shillings, we will organize so that ordinary people are benefitting,” he said.
Further, DP Ruto said his government will ease access of credit to SMEs which he said will increase earnings for most small-scale businesses.
As part of his agenda, Ruto also said he will alter the National Social Security Fund (NSSF) contributions which are currently at Shs 200 for all Kenyans by setting a standard of five percent for everyone’s income.
By doing so, DP said the fund savings will be sizeable enough that will hold resources that will enable the government to source from, and be able to finance development projects with ease.
“We will make sure the law is changed within the first 100 days to ensure that even if we agree to 5 percent for everyone’s salary to be saved,” he added.
“The money we are borrowing is savings for other countries and we are paying with interest, we are borrowing everyone’s money except ours. we must be able to build a huge fund for us to be able to borrow and finance our activities,” he added.
