Entry Instance

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

{
    "id": 723063,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/723063/?format=api",
    "text_counter": 165,
    "type": "speech",
    "speaker_name": "Hon. Ichung’wah",
    "speaker_title": "",
    "speaker": {
        "id": 1835,
        "legal_name": "Anthony Kimani Ichung'Wah",
        "slug": "anthony-kimani-ichungwah"
    },
    "content": "It is also worth noting that the movers and shakers in the housing and real estate sectors are in the SACCO movement. They have even formed housing companies. Mhasibu, the Police and Safaricom SACCOs have housing companies. The Safaricom SACCO has an investment arm. We cannot allow this industry to operate without regulations. Matatu drivers and touts are now forming their own SACCOs. We must have distinguished between SACCOS where co- operators come together to save money and advance credit to each other, and those which utilises people’s deposits. Hon. Speaker, the Member for Juja is interrupting me with notes about Kiambu, but I want to tell him that this issue is bigger than Kiambu. I know that he is concerned with grabbers of land belonging to SACCOs and land buying companies in Kiambu. I hope he will get an opportunity to talk about the issue. I was talking about the question of credit information sharing. If we must enjoy the benefits of true and sustainable lower interests in this country, then we must have free exchange of information. We are not operating in a perfect economy because we do not have free exchange of information, which is very important in the financial services sector. We cannot have credit information sharing within the banking sector and leave out the SACCO movement that is also advancing credit. As a Committee, we support what is in the Bill in terms of sharing credit information between SACCOs and other financial institutions. That way, I do not borrow Kshs10 million from Mhasibu SACCO and default but, because the information about my inability to service the loan has not been shared with the banking sector, I walk to a bank and borrow again. That is happening. Those who do not have good credit ratings with the banks are now moving to the SACCOs and taking the same disease of defaulting. That kills the vibrancy of the financial services sector in this country. I want to dwell more on credit sharing and interest rates. In days to come, I have legislative proposals that I have spoken about in terms of how we can sustainably bring down interest rates or make them lower without necessarily capping them. Capping has been argued as not being good by the International Monetary Fund (IMF) and banks in this country. It may not be in the long-run. I can tell you, as a student of Economics, that interest capping in the long-run will not be the ultimate solution to bringing down interest rates, but the way banks were behaving and the way some of our SACCOs are behaving, it was a necessary evil that we had to do to force the banks and other financial service providers to bring down the interest rates. However, we must now begin looking at other successful ways of bringing down interest rates like credit sharing and reducing on Government borrowing both from the financial service sector and from individual people. The Government is borrowing as much as time goes. The cooperative sector is also advancing money to the Government, but we must cap how much interest the Government can pay. Banks and other financial service sub-sectors will have no business lending to you and me if they can lend to the Government at 13 per cent and we have capped our interest rate at 14 per cent. I am short of time, but I wish to support the Bill without any amendments. If there are amendments, they must enrich the protection of depositors’ funds and not downgrade the gains as Hon. Maanzo sort to do."
}