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{
    "id": 472102,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/472102/?format=api",
    "text_counter": 77,
    "type": "speech",
    "speaker_name": "Sen. Billow",
    "speaker_title": "",
    "speaker": {
        "id": 260,
        "legal_name": "Billow Adan Kerrow",
        "slug": "billow-kerrow"
    },
    "content": "Mr. Speaker, Sir, I respect the Senator. However, I think he missed something. When I was presenting, about page four of that Report, I said that there are up to seven, eight or nine steps that the Government is taking to try and address that issue. One of them is the one that I mentioned on the KBA preference rates that were published last week. There are many other steps that are being taken. I did not want to go into detail. You can read these in the statement. The correlation in the schedule that is provided here is very clear. There is no direct correlation. I want to give two examples because this matter has come up several times. The figures from 2003 up to 2012 are provided. If you look at 2009/2010 Financial Year, you will see that in 2009, the interest rates were 15 per cent and banks made Kshs137 billion. The following year when the interest rates went down to 14 per cent, commercial banks still made a profit of Kshs177 billion. In other words, the profits were still going up even when the rates were going down. That means that the profits were not just from the interest earned on lending. This comes also from other sources and this is what I said. In 2012/2013, the percentage interest rates were at 20 per cent and yet they earned Kshs207 billion. In 2013, when the rates went down to 13 per cent, the figures went to Kshs278 billion. So, the problem is not necessarily directly correlated. That is the point I was making. There are a number of steps that are proposed. The challenge is on us to determine how we want to regulate interest rates. In 1992, when we liberalized the markets, since then, the rates have been determined by market forces. It is the desire of Parliament to regulate interest rates and to set limits on the maximum that a bank can charge as we have done in petroleum and other sectors. That responsibility is upon this House. I think that is something we can look at. So far, there is no regulation in force that limits lending rates. Therefore, you cannot say that a Governor is the one who has failed to enforce existing regulations. The last point with regard to what Sen. Muthama raised on the difference between rates for foreign currency and the Kenya shilling in terms of lending, this is a fact. The risks and the costs associated are not the same. The risks associated with lending in The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate."
}