Entry Instance

HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept

{
    "id": 472047,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/472047/?format=api",
    "text_counter": 22,
    "type": "speech",
    "speaker_name": "Sen. Kembi-Gitura",
    "speaker_title": "",
    "speaker": {
        "id": 242,
        "legal_name": "James Kembi Gitura",
        "slug": "kembi-gitura"
    },
    "content": "Mr. Speaker, Sir, I would like to start by thanking the Chairman of the Committee for a reasonably well thought-out answer and for the support that he has given to it, but going through the whole of that Statement, one finds that there are a good number of contradictions in the relationship between the profits made and the interest rates charged. The last part of the question was a rider by Sen. (Dr.) Khalwale, and I am sure he is going to follow up on it. Mr. Speaker, Sir, at least, there have been some concessions that there is that relationship between high interest rates and very high profits made because this must be the only country in the world where banks would proudly state at the end of the year that they have Kshs17 billion after tax profit. In the meantime, very few people have been able to finance their mortgages or borrowings because part of the reason there is that high profit is because of the recoveries they are making in realizing or fore-closing on mortgages. There is a concession that 83 per cent of the loans are financed by the money we deposit in the banks as fixed deposits. You will note that if I deposit my Kshs1 million in the bank for six months or a year, I will get between 3 per cent or 5 per cent returns. If I borrow money, which is the one that another person had deposited there, I will be paying at the rate of 18 per cent per annum. Already, you can see that big disparity between how much I am getting in return for my money and how much the bank is getting. Mr. Speaker, Sir, they talk about wage bills, this is not public wage bill. This is the wage bill for the people they have employed. Then they say that this compares in the region, it does not? It does not compare in the region because if you look at the table that has been put there, you will find that in South Africa, for instance, interest on borrowings is at 8.8 per cent on average for the last ten years. In Nigeria, it is 16.8 per cent which is high; in Mauritius it is 8.7 per cent and in Malaysia, it is only 4.8 per cent. Why is there such a big disparity? Why has there been an oscillation between 11 per cent and 20 per cent in Kenya over a period of ten years? If it is not a human-made interest rate, CBK has given certain directives and some banks like Standard Chartered have already started charging lower rates. Which means it can be done if it was not something internal, either in management, policy or such other things which can be controlled. So, the question I am asking is: Does the CBK or the finance sector in Kenya realize how much investment opportunity are being lost because people cannot possibly invest unless they have cash kept in suitcases in their homes? If you have to borrow to develop, it is impossible to repay a mortgage over a period of five years, how much is this affecting the development in the counties? That is the reason I am asking these questions. Mr. Speaker, Sir, at least, I can see some positives because CBK has set up that committee and we are hoping that it is going to bring down interest rates based on those policies and not necessarily on the Euro-Dollar Bond that was recently effectuated in the country. So, the Chair is supposed to look at all those questions and see why when they talk about 42 per cent and then they say “only”---"
}