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{
    "id": 1201144,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1201144/?format=api",
    "text_counter": 224,
    "type": "speech",
    "speaker_name": "Sen. Oketch Gicheru",
    "speaker_title": "",
    "speaker": null,
    "content": "The people at the lower part of the pyramid in the country are not saving because they do not have income. It is not that are unwilling to save but because they cannot save what you do not earn. Therefore, our national saving strategy should include the issue of improving income. Closely to that, the President talked about lowering the cost of credit. This is critical because it will bolster the culture of saving nationally. However, looking at online lending platforms that we have such as Fuliza, the approach we have is not the right one. This House should ask the Executive to commission a credit absorption and utility assessment task force to look into where people at the lower part of the pyramid borrow to spend. According to my experience as a ThinkTech expert, such people borrow firstly for consumption. Secondly is to spend on working capital for small businesses. Thirdly, they spend on buying assets that can help them in running their businesses better. Just to give an overview of how Fuliza works; people borrowing between Kshs1 and 100 are 68 per cent, 22 per cent borrow between Kshs100 and 500, 4 per cent borrow between Kshs500 and 1,000, 2 per cent borrow between Kshs1,000 and 1,500, while 3 per cent borrow between Kshs1,500 and 2,500. The critical working capital class where we should have huge borrowing is only 1 per cent and they borrow between Kshs2,500 and 75,000. That means that a majority of people borrow money to buy food or medicine or cater for their basic needs. We need to look at this critically. The President should find a way of dealing with financiers who give loans that go to assets. For example, we all know that in Kenya today, one of the biggest employers is the boda boda industry. According to the National Transport and Safety Authority (NTSA) and the Kenya Bureau of Statistics (KEBS), we have 1.5 million boda boda operators within our borders. Among these, 97 per cent get their boda bodas from financiers such as Watu Credit. Let us assess what is happening in the market. If you look at a basic boda boda that is commonly used in Nairobi City County, TVXHLX 150X Model costs Kshs150,000. However, when they go to Watu Credit, which is not regulated by the Central Bank of Kenya (CBK), they are charged a processing fee of Kshs23,000 and are also required to pay a deposit of about Kshs20,000, yet the same financier requires them to be subjected to a 4.5 per cent interest."
}