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{
    "id": 644551,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/644551/?format=api",
    "text_counter": 119,
    "type": "speech",
    "speaker_name": "Hon. Nuh",
    "speaker_title": "",
    "speaker": {
        "id": 2840,
        "legal_name": "Junet Sheikh Nuh",
        "slug": "junet-sheikh-nuh"
    },
    "content": "Thank you, Hon. Temporary Deputy Speaker, for giving me an opportunity to contribute to this Bill. Banks are very important to Kenyans. For economic activities to prosper or for this country to develop economically, cheap credit must be available for people to conduct their businesses. If you look at the trend in this country for the last 10 years, you will find that it is only in the banking industry where losses are never made. Any other businesses make losses once in a while. If they make profit this year, there are chances that next year they might make a loss. But it is only the banking industry that has reported profits for the last 10 consecutive years. That tells you a lot. There is no way your business can be making profits even at times when the economy is not good. The banking industry must feel ashamed. They must understand that they are making the lives of Kenyans very difficult. We are not suggesting that they should give free money to Kenyans to do business, but they should give money at interest rates that their borrowers can pay. If you deposit your money, banks will offer you an interest rate of 7 to 8 per cent. If you want to borrow the same money, they will give you at an interest rate of 20 to 30 per cent. What changes overnight? Why do you want to take deposits from Kenyans at 5, 6 or 7 per cent and lend the same money to Kenyans at 30 per cent? Everybody can do that kind of business. Take money at 5 per cent and lend to the second person at 30 per cent. It is as simple as that in spite of other costs involved. So, it is high time Parliament, as the law-making organ of this country, puts measures in place to protect the interest of Kenyans. Banks are complaining about bad loans. They say that many of the loans are not being repaid because of the economic problems the country faces sometimes. High interest rates make the performance of those loans even worse. You will find somebody who has borrowed Kshs100,000 or Kshs200,000 will be told to pay Kshs1 million or Kshs1.5 million. Where do you expect somebody who is unable to pay Kshs200,000 to get another Kshs1 million to pay you as interest? Common sense dictates that you should know if this person cannot pay you the Kshs200,000 you lent him, he cannot give you Kshs1 million more as interest. I support this amendment. It is going to put sense in the minds of managers and owners of banks in this country. You cannot behave like cartels. The banking industry in this country is behaving like cartels. They sit down and agree on interest rates. You cannot find interest rates in one bank different from another bank. It is like the banks sat somewhere and agreed to lend at 22 or 25 per cent. As other Members have said, it is high time the Competition Authority looked into why banks are lending at the same rate. Why can we not have a bank that is lending at 10 per cent and another one lending at 20 per cent? Finally, Kenyans are losing their money. For example, the Chase Bank’s 55,000 depositors’ money is at risk just because a few directors gave themselves billions of shillings which do not belong to them. The supervisory department of the CBK must tell us whether they 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."
}