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{
    "id": 1511186,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1511186/?format=api",
    "text_counter": 262,
    "type": "speech",
    "speaker_name": "Ainamoi, UDA",
    "speaker_title": "Hon. Benjamin Lang’at",
    "speaker": null,
    "content": " Thank you, Hon. Temporary Speaker. I rise to support this Bill on behalf of the Departmental Committee on Finance and National Planning. As you can remember, when the Bill was read for the First Time, the Hon. Speaker gave responsibility to two Committees. These are the Departmental Committee on Trade, Industry and Cooperatives and the Departmental Committee on Finance and National Planning. As you will realise, this is an omnibus Bill touching on different business laws. The Departmental Committee on Finance and National Planning was given the responsibility of considering Clauses 1 to 19, which are the sections amending the Central Bank of Kenya Act, Banking Act, Microfinance Act and other related laws. We considered the provisions affecting the banking sector to improve its financial stability. One of the biggest or notable changes is that this Bill seeks to increase the core capital requirements of banks. This is from the present Ksh1 billion to Ksh10 billion progressively in three years. The Committee noted that our core capital in the banking sector has remained at Ksh1 billion for almost 10 years. We are a growing economy, our population and the number of companies operating in this country are increasing. So, we need strong banks that can absorb the shocks in the financial sector. Therefore, this proposal is welcome. During public participation, we had representatives from the banking sector. Although they agreed with the proposal in principle, they had an issue with the timing. If you ask a bank to get an additional Ksh9 billion within three years, it means they have to sell all their investments and channel to capital requirements. This means they will be unable to lend to the private sector in the next three years. They added that even if they were to merge because of this requirement. The merging process requires time to be seamless and have the right structures. During the Third Reading, we shall introduce some amendments, especially in terms of the time required to increase the capital requirements. So, we agreed on eight years with some milestones: after three years, they must have Ksh3 billion, Ksh5 billion after four years, and finally, in the eighth year, they required Ksh10 billion. The other proposals are for non-deposit-taking microfinance businesses. These providers have been operating without a regulatory framework outside the CBK ambit. It is high time this sector is regulated. They do a lot of lending but charge interest up to two or three times the original loan. This Bill seeks to bring all the non-deposit-taking microfinance"
}