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{
    "id": 632500,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/632500/?format=api",
    "text_counter": 207,
    "type": "speech",
    "speaker_name": "Hon. Angwenyi",
    "speaker_title": "",
    "speaker": {
        "id": 326,
        "legal_name": "Jimmy Nuru Ondieki Angwenyi",
        "slug": "jimmy-angwenyi"
    },
    "content": "Thank you, Hon. Temporary Deputy Speaker for giving me a chance to contribute to this very important Bill. This Bill is important but we need to analyse it fully. What will be the consequences of this Bill being passed and implemented? We are a liberalised market. Do we want to go back to the controlled market situation that we have experienced before? If we curb the interest rates, these are some of the consequences that will arise. One, we will create a fertile ground for shylocks to make money. Two, it will demand of us to make a law to implement exchange controls such that if you are travelling to Tanzania, Uganda or Europe, you will have to seek approval of CBK for you to access foreign exchange to travel. Three, some of the financial service providers in this country will have to relocate. On this, we can take the example of countries which have moved from Third World to First World. They have liberalised their financial markets fully. For example, Singapore, Malaysia and Brazil whose interest rates are not controlled and their financial services contribute enormously to their Gross Domestic Products (GDPs). The other example is Dubai which now makes from its financial services more money than the national Budget of Kenya. I know we have a problem, but this is a problem we wanted to address two years ago when we allowed the Government to borrow from the external market instead of the domestic market. This was meant to allow funds to be available for SMEs and individual customers to develop their businesses. But we have not followed up. What was the impact of external borrowing at that time? Was our objective achieved? There is a problem because the Government borrows so much from the local market to the extent that there are no funds available for banks to lend cheaply to other small customers. Japan has a negative interest rate not because there are caps, but because they have too much money. Even if you want to deposit money in a bank in Japan, you pay interest to the bank. It is not because they have interest rate caps, but because their market is well regulated to the extent that there are funds available for anybody who wants to do business. If we established partnerships between the Government and banks, funds such as Uwezo Fund, Youth Enterprise Development Fund and the Women Enterprise Fund could be given to specific banks working with the Government. That can reduce interest rates that our people pay. We will also recover money which has been advanced to our small-scale enterprises. The worst thing if we were subjected to exchange control is that we would not be able to move forward. Even Members of Parliament who make trips abroad would not make those trips without the approval of the CBK. With those few remarks, I beg to oppose. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}