During a Kenya Bankers’ CEO chat on Friday, it was revealed that local banks would, through the Kenyan Bankers Association (KBA), soon launch an Inuka initiative for small and medium enterprises (SME’s).
— Kenyanwallstreet (@kenyanwalstreet) September 22, 2017
Accelerated lending to SME’s was one of the pledges that the banks had set out to accomplish ahead of the passing of the interest rate capping bill of 2016 by Kenya’s parliament as it edged closer to becoming a law. The banks committed to set aside SME support facilities at all banks that would channel Kshs 30 billion to SME’s and a third of that would go to SME’s owned by women and youth. These firms would borrow at a concessionary rate not exceeding 14.5% and banks would progressively report, each quarter, on their allocations, SME loan uptake, and loan performance.
But the interest rate cap did pass, which resulted in SME’s borrowing at the same level of interest that the banks had pledged. Other commitments that the banks made and which they have fulfilled include ending the practice of account oolong charges, and they also rolled out the KBA cost of credit web site and calculator to enable bank customers to properly assess the cost of loans offered, with the impact of bank fees, before they commit to borrow any money.
— #KBAat55 (@KenyaBankers) September 22, 2017
After the chat with I&M Bank CEO, two more KBA CEO chats are scheduled in that next few weeks with the CEO’s of Dubai Islamic Bank Kenya on 29th September and of Family Bank on 6th October.