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"content": "Thank you, Mr. Temporary Deputy Speaker, Sir, for giving me the opportunity to contribute to this debate. I also rise to support this very important Bill. The Ninth Parliament, whose sittings you have presided over many times, must be congratulated for being futuristic and working hard to ensure that Kenya becomes a \"tiger\" nation in Africa. As I support the Bill, I would like to say that it is not right for the Government to ambush us. Many of us who prepare meticulously for debate on specific Bills came here prepared to discuss the Refugees Bill. We were surprised when debate on this Bill started this afternoon. That is why the Chairman of the Committee on Finance, Planning and Trade was not ready to respond. Nevertheless, I will take up a few issues that the Minister has talked about. Mr. Temporary Deputy Speaker, Sir, the Minister said that the economy has recovered. I have a few questions for him. If the economy has recovered, why the rampant unemployment? Why are hawkers on the streets? This is quite cheeky. We really need to put our act together to ensure that the economy recovers. The economy has not recovered. The figures that we are being given are called statistics. One of my lecturers at the University of Nairobi, in the 1970s, described statistics in three ways. He said that there were lies, damn lies and statistics. He once argued that if 50 per cent of your body is in the fridge, and the other 50 per cent in the oven, on average, you are fine. I do not intend to use unparliamentary language but, really, that sounds silly. Mr. Temporary Deputy Speaker, Sir, even before the Minister and his colleagues on the Government side start referring to the policy Paper on Vision 2030 on the Floor of this House, he should table it here, so that we can also have a chance of looking at it, so that when he talks about it, we can agree or disagree with him. This Bill addresses a very fundamental issue. It seeks to address the issue of affirmative action, which is about the needs of the poor people of this country. It is a fact, which the Minister has accepted, that the poor are the majority in this country. He said that 60 per cent of the Kenyan population, or 18 million people, fall in the poor category. That is the vast majority of Kenyans. 3528 PARLIAMENTARY DEBATES November 8, 2006 Mr. Temporary Deputy Speaker, Sir, the financial system in this country is such that only rich people have access to finances. Only rich people with security are able to access financial credit in the banks. The conditions are onerous. Even I, as a Member of Parliament, about whom people say we earn huge salaries, have been going to a particular bank for years now, trying to secure a loan with which to start a business, since as a politician, you never know when I will retire, but it has not worked. Banks ask for one security after another before they give you a loan. You will also have to pay for valuation of your property, among other things. So, the poor of this country are, really, suffering. The enactment of this Bill will discourage a very common practice in this country, which has caused untold suffering to many Kenyans. That is a practice called shylocking. The practice is very common in this country. In may companies, you find people who are ready to lend money at very exorbitant interest rates. Somebody will make you sign an agreement, indicating that he has lent you, say, Kshs10,000, when he has actually lent you Kshs9,000. You will then have to pay him back Kshs10,000 at the end of the month. Mr. Temporary Deputy Speaker, Sir, if you do not pay back the amount, the interest gallops at compound interest rate to the extent that he can actually mortgage you and your salary. I know people who had to take loans to pay shylocks. Once you go into the hands of a shylock, there is no way of coming out. There is a vicious circle. You will always borrow to pay the shylock. You will then borrow from him again, so that you can survive and so on and so forth. That is a dangerous practice for Kenyans. I know that many hon. Members want to speak on this Bill. Therefore, I will only look at a few areas that concern me, starting with the Schedule. On page 1126, the Schedule talks about minimum capital requirement. Specifically, under item (a), the Schedule talks about a core capital of not less than 10 per cent of total risk adjusted assets plus risk adjusted off balance sheet items as may be determined by the Central Bank of Kenya. Under item (d), the Schedule talks of a core capital of, at least, Kshs60 million or, in the case of a deposit-taking business of a category prescribed for the purposes of this paragraph under Section 7, a core capital of, at least, Kshs20 million. Mr. Temporary Deputy Speaker, Sir, this is sad. We ought not to lock out the rest of Kenyans. I can foresee a situation where Kenya will be subjugated by a few rich people who have had access to money, in some cases, illegally. Such are the persons who will raise the capital proposed in this Bill. People in Kisumu, with its dilapidated infrastructure and many other problems, and others in Kapenguria and the North Eastern Province, cannot raise that kind of money. To that extent, all the micro finance institutions we are going to create under this law will belong to a certain category of people, probably from a certain area of this country. That will be wrong. We ought to make a law that will take advantage of the diversity in this country, and the fact that we ought to serve everybody equally countrywide. Therefore, I will ask the Departmental Committee to move an amendment during the Committee Stage, to review these figures to a minimum of Kshs10 million and maximum of Kshs30 million. That will be acceptable to me. Mr. Temporary Deputy Speaker, Sir, having said that, I will proceed to the licensing provisions, which are, indeed, quite onerous. These provisions involve the Central Bank of Kenya. We know for certain that there are many regulations, including a presumptive fee, which is a precise fee that is not stated. I am referring to Clause 5(2)(e). This fee ought to be prescribed, so that we know what it is, rather than leave it to be fixed by the Minister. Mr. Temporary Deputy Speaker, Sir, we know for certain that there are certain situations where the Central Bank of Kenya has been used to destroy some financial institutions. I want to refer to the era before, when a lot of indigenous banks were forced to close down because of November 8, 2006 PARLIAMENTARY DEBATES 3529 political activity, and the Central Bank of Kenya was misused, deliberately or otherwise, to ensure that these institutions did not survive. It is sad that the Kenyan banking sector is still dominated by foreigners. This is a country that ought to stand on its own, and indigenous investors must be protected so that they can own some of these institutions. So, the Central Bank of Kenya ought to exercise all that power given to it with caution so that they can give the people a chance to own these banks without discrimination, either on ethnic, political or whatever other reasons. Mr. Temporary Deputy Speaker, Sir, there is the question of abuse of those powers. Just the other day, we had a scandal with respect to Charterhouse Bank. We do not know whether they were actually doing something wrong in terms of money laundering or not, because the Finance, Planning and Trade Committee had written a report saying one thing, while the Central Bank of Kenya said another thing. I want to see a situation in this country where, when something is white, it is white, and when it is red, it is red. But it cannot be both red and white! It is not possible to have two sets of facts about the same situation. When we are making laws, we have to raise this issue because it is very important that these laws serve the people of this country properly. Mr. Temporary Deputy Speaker, Sir, with respect to the provisions relating to governance in part III and particularly in Clause 12(1), which says:- \"An institution shall maintain such minimum holding of liquid assets as may be presided by the Central Bank of Kenya;\" Liquid assets are very important. We know of banks which have risked a run on them because they do not have enough money to pay their depositors when the money is required. Therefore, I think that is a good provision. But when you come to Clause 13(1), it says:- \"No person carrying out deposit-taking business shall:- (a) Open a place of business outside of Kenya; or, (b) Open or close a place of business in Kenya without the prior approval of the Central Bank of Kenya\" I want this country to open its eyes. The issue of trade is very important and a financial institution is of significance in the trade sector that we cannot do without them. I have in mind a situation where we know for certain that Kenya has been a centre of peace. This country has sacrificed a lot of resources to ensure that the Southern Sudan peace process succeeded, and now we have a semi-autonomous government in Southern Sudan. We hope that the same situation will also apply to Somalia. When the USA goes to war in Iraq, many of us do not seem to know that they are not just going to get rid of Saddam Hussein; they are going there because of the economic benefit and because of the oil! The question of Southern Sudan, which is now an open market, if we do not have a banking system that can get there, we ought to be taking advantage of that market! We hosted those people here for a long period of time. This Government sacrificed a lot of money and space to make sure that the peace process succeeded in Southern Sudan. But in the end, we are now not able to take advantage, and instead, South Africa, Uganda, Tanzania and other countries are the ones taking advantage. Why can we not form a system whereby we give our people the opportunity to also do business there? After all, we sacrificed our taxpayers' money, our time and the Government's time to make sure that they have peace! We really ought to reap the dividends of the peace in Southern Sudan. Mr. Temporary Deputy Speaker, Sir, the question of declaration of dividends in Clause 15(1) is okay, and I agree with it wholly. But the question of insider lending in Clause 18(1) is of significance. Insider lending in a bank is a dangerous thing, and I want to agree with this provision wholly. The question of insider trading is what brought down Uchumi Supermarkets. There is one particular director who has been in everything that collapsed, including KENATCO. He was in 3530 PARLIAMENTARY DEBATES November 8, 2006 Uchumi Supermarket, and it collapsed. He was in KENATCO, and it collapsed. Instead, they built the International Life House! These companies belongs to the people of this country! They were started with taxpayers' money! It is a shame that an individual wants to go around saying that he is not corrupt, yet he is behind all these collapses and he is able to take out his capital at the right time before an organization collapses! That is wrong. Therefore, the question of insider lending is important and we hope that those who are given the responsibility of making sure that these laws are observed properly will take their work seriously. Mr. Temporary Deputy Speaker, Sir, we want to support this Bill with the amendments that I am going to ask the Finance, Planning and Trade Committee to take note of. I also want to give my colleagues an opportunity to contribute to this Bill because it affects the poor people of this country. With those few remarks, I beg to support."
}