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{
    "id": 632472,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/632472/?format=api",
    "text_counter": 179,
    "type": "speech",
    "speaker_name": "Hon. G.W. Omondi",
    "speaker_title": "",
    "speaker": {
        "id": 1169,
        "legal_name": "George Washinton Mallan Omondi",
        "slug": "george-washinton-mallan-omondi"
    },
    "content": "Thank you, Hon. Temporary Deputy Speaker. I know that once this Bill is passed in this House, His Excellency the President is going to be visited by very many people with complaints. The IMF and the World Bank (WB) are going to come in. Let me make a differentiation. What Hon. Jude Njomo’s Bill intends to do is not to control interest but rather interest regulation. This should be acceptable because if one bothers to read what happened in the United States of America in 2008, he or she will find out that the reason why they had the banking crisis is because they had very minor regulation. Banks left on their own will do all sorts of things. That is why when President Obama ascended to power, he strengthened the regulations, including interest regulation. We also have to do it. Many people have said that interest regulation or control, as they mistake it, will stifle the economy and make it not to grow. Again, nowhere in the world do we have the so called perfect competition. It is always a mix of government and the private sector. In this case, the government steps in when something is going to hurt the citizens. In this particular case, the high interest rates hurt the citizens and it is important that the Government steps in and regulates it but not to control it. The question as to whether the Government should come in or not should be pegged on three points. One, is the banking industry in this country free? Is it big enough? Is there free entry and exit? The answer is “No”. There are few players and, therefore, they are able to sit down and form a cartel and hurt the people by raising interest rates. Secondly, are our people knowledgeable on what is happening in the banking industry? Can they differentiate between who is charging more and who is charging less? The other day, the banks were being forced by the CBK to tell citizens how much they are charging. This is information that when a borrower or a consumer is armed with, he or she will be able to differentiate and go to the banks that charge lower. This is not possible in our country. Another reason why interest rate should be regulated is that the Government has good intentions to create jobs and better the welfare of our youth. However, because of these high interest rates, jobs are not being created. The youth are not accessing cheap funds that they can plough into business that they get through procurement. For these reasons, it is important that the interest rates are regulated as proposed by Hon. Jude Njomo. We appeal to our President not to listen to the world players who are going to say that the Kenyan economy is going to be stifled if interest rates are capped. Let him look at what is best for Kenyans. With those few remarks, I support."
}