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"id": 235982,
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"speaker_name": "Mr. Poghisio",
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"legal_name": "Samuel Losuron Poghisio",
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"content": "Mr. Temporary Deputy Speaker, Sir, thank you very much for giving me this opportunity to join my colleagues in congratulating the Minister for Finance for actually, finally, bringing this Bill to the House. I know that there are many stakeholders, including microfinance institutions, that have worked very hard to make sure that there is regulation in terms of licensing and the overall supervision of these institutions. I must tell the Minister that it will be a very tall order; coming from trying to organise a sector that has been riddled with quacks and outright thieves. Mr. Temporary Deputy Speaker, Sir, many people have been taken captive by these irregular and illegal institutions which are already in the market. So, the Minister will have a very November 8, 2006 PARLIAMENTARY DEBATES 3531 difficult task of trying to sort out the legal from the illegal institutions. I have a question for the Minister: We may supervise those institutions that are visible, but there are many of them down in the villages which have held our people captive. I wonder how he will deal with such institutions. Mr. Temporary Deputy Speaker, Sir, this is a Bill that seeks to provide for licensing, regulation and supervision of microfinance institutions. We, as a country, must begin by cultivating a culture of banking, which is lacking among our people. What is the percentage of Kenyans that actually does any business with banks? It is very small. We are now beginning a process of expanding the banking culture in this country. Given that we have to enact an Act, there must also be provision for civic education. There must be some institutions that will teach our people the culture of borrowing and banking. This is something that is lacking in many parts of the country. I would like the Minister to take note of the fact that we are introducing something into a market that will spread and scale up banking in the country. We must begin now, because other countries around us are ahead of us. Village banks, mobile banks and microfinance institutions are already functioning and regulated in some of countries. We must introduce them to our people. The culture of borrowing will reduce incidents of merry-go-rounds and Harambees that are held every week. People will begin to work harder, or they may do it in a better way. This is because they will be able to access funds to do the kind of things for which they might be needing Harambees. I know that, at some point we tried to do away with Harambees, but it became very difficult. I know that the harambee spirit has really been abused. Everyone who wants to do something must organise a Harambee, even when he is in a position to meet the obligation. So, the enactment of this Bill will help reduce such incidents. Also, with the increase of insecurity, the introduction of microfinance institutions means that there will more money in rural areas. Those who have money in the rural areas are in danger because of robbers and criminals who roam around. I am told that these days, they even attend Harambees and merry-go-rounds. So, they know exactly how much money is collected. Later on, they come asking for it. So, with the introduction of microfinance institutions, more money will be available in rural areas. As a result, insecurity will increase. The Government must begin to tackle this issue of insecurity seriously, as relating to microfinance institutions. So, there are many things that are good about this Bill. The introduction of any other Bill or law will create other situations that we must address. As we tighten the rules on irregular and illegal microfinance institutions, this Bill must include, among other things, the penalties for people who will be introducing other illegal ways of lending money, such as shylocking. We had better begin to help our people correctly. Mr. Temporary Deputy Speaker, Sir, my other concern is that most financial institutions would like an environment that is accessible, with good infrastructure and located very close to any existing bank. Will this environment be friendly and workable in rural areas? Will it really work in Kacheliba Constituency, El Molo and some areas in northern Turkana? Will it be able to work where there is no access whatsoever? Are we not simply creating another banking system for the already established and with resources? Those questions beg for answers. It is easier for microfinance institutions to just follow the highway and keep close to the supermarkets and high- potential areas, and forget to help those that are actually depending on livestock and other things. So, while we contribute and say we support this Bill, there are many things that need to be in-built to safeguard the interests of those stakeholders who are not necessarily along the highways and those who do not have access to electricity. For example, there is no bank in the whole of Kacheliba Constituency. The only \"banks\" we have move on four legs; that is, the livestock. That is all we know. There are many other things which are lacking in a place like Kacheliba Constituency. That is just one example. So, I appeal to the Minister to try and create an instrument that will be useful to the whole 3532 PARLIAMENTARY DEBATES November 8, 2006 of our society. Let us not create an instrument that will discriminate some members of our society. Let no law discriminate. I hope that this will be provided for. I know that the role of the Central Bank of Kenya (CBK) is very well provided for in this Bill. That is very central in terms of supervision. I agree with that. Mr. Temporary Deputy Speaker, Sir, in concluding, looking at this particular Bill, it is very clear that the instruments of banking, providing resources and deposit-taking are provided for and taken care of. The loopholes that are there need to be tightened. Also, the net must be spread wider to include areas that are not necessarily near anywhere that the Minister knows. With those few remarks, I beg to support."
}