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{
    "id": 200862,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/200862/?format=api",
    "text_counter": 275,
    "type": "speech",
    "speaker_name": "Mr. Kimunya",
    "speaker_title": "The Minister for Finance",
    "speaker": {
        "id": 174,
        "legal_name": "Amos Muhinga Kimunya",
        "slug": "amos-kimunya"
    },
    "content": " Mr. Temporary Deputy Chairman, Sir, I beg to oppose the amendment by hon. Kajwang on the basis that, one, we deliberated on this matter with the Committee and have agreed. Secondly, I will give the rational for the increase in the capital requirements of the mainstream banks as opposed to the micro-finance institutions, for which this House now passed a law. The law says that anyone who wants to operate a small bank has the option through the Micro-Finance Act, where you only need Kshs20 million to operate in one area or Kshs60 million to operate on a national basis. Let us now move all the other banks to where we have higher capital requirements because the financial demands in the banks, regulatory frameworks and the compliant issues do not make sense. If your capital base is at Kshs200,000, you will not comply with the rigidity and make a decent return that will be able to put you in business. So, because we now have an avenue for the small banks, we might as well distinguish the small banks from the big banks. That is the rational. As you know, when you are talking of an economy of Kshs2.05 trillion, you need the big banks to actually support that kind of economy. It has nothing to do with forcing people to merge. People are voluntarily merging. In fact, people call upon one another now to merge. Not just because of the capital requirements, but it makes sense to operate and to tap on the economies of scale. Mr. Temporary Deputy Chairman, Sir, I beg the House to reject the proposal by hon. Kajwang. It is a position we had agreed on with the Departmental Committee and then we can move onto the amendment that I will be proposing."
}