Entry Instance

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

{
    "id": 935791,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/935791/?format=api",
    "text_counter": 556,
    "type": "speech",
    "speaker_name": "Garissa Township, JP",
    "speaker_title": "Hon. Aden Duale",
    "speaker": {
        "id": 15,
        "legal_name": "Aden Bare Duale",
        "slug": "aden-duale"
    },
    "content": "I will give you a good example. If a Kenyan SME is supplying vegetables to these big retail chains, they will tell him: “My friend, our terms is that we will pay you after 120 days. Secondly, you should do this.” Because of that big bargaining power, the SMEs become victims of this power given to the big retail contractors. So, what have these buyers done? This has led to even terminations. The moment they ask for their money after 90 or 120 days as per the contractual obligations, the big buyer will tell them that if they pester him, he will terminate their contract. The law is very clear that they are supposed to complain to the Competition Authority of Kenya (CAK). Unless you complain, the CAK cannot take action. This amendment is now giving the CAK powers to investigate. Even SMEs cannot complain because they are scared of the repercussions they will face as businesses. These events have exposed our SMEs to huge debt portfolios due to late payments to the extent of occasioning closure of businesses. There are Kenyans who supply big companies and retail shops. Because the buyer has a powerful bargaining tool, an SME ends up closing shop because he buys in cash from the market, but when he takes the commodities to the big buyers, he is given terms ranging between 120 days and 190 days. He cannot complain if his payment is delayed. He is threatened with termination of the contract. I want to go on record, and this must be very clear to Kenyans, that according to the reports by the Kenya Bureau of Statistics (KBS) and the National Treasury, collapsed retail chains like Nakumatt and others which are in business today owe SMEs over Kshs40 billion. There is a problem in our country. Banks are under the supervision of the Central Bank of Kenya (CBK). They have the Kenya Deposit Insurance Corporation (KDIC). A bank goes under because they mismanaged depositors’ cash amounting to Kshs20 billion or Kshs30 billion. Nakumatt has gone under with over Kshs40 billion it owes to SMEs in Kenya. This is a very serious matter. Currently, Nakumatt has been put under receivership, just like Mumias Sugar Company. Who is suffering? The small-scale farmer who was planting less than two acres to feed his family, pay school fees and does not know what a receivership is. His life has collapsed just like the way county governments do not want to pay pending bills. I want this House to take a very proactive measure to save SMEs, which supply commodities to retail chain supermarkets and other contractors. When these companies go under, the victims are the small traders. Nakumatt owes SMEs close to Kshs40 billion. That is close to a bank going under. There is nobody speaking for them. It is very sad for Kenyans who supply electronics. It is very immoral. When you walk to a supermarket, you do not get credit. You pay cash. Because of the bargaining power that big supermarkets have over retailers and suppliers, they tell Kenyans who supply them that they will pay them after 120 days. That is illegal. It is worse than interest rates. You sell my goods in cash and you want to pay me on your terms. That is the issue this Bill is trying to resolve. It states that the CAK must investigate those kinds of institutions and companies which use their powerful bargaining power to kill SMEs. There must be insurance in law to protect Kenyan depositors. I have never banked with Chase Bank or Imperial Bank. You have Kshs50 million then a receiver manager tells you, “We will pay you in the next 10 or 20 years.” It does not happen in developed countries. We must pass a law that will ensure that when a bank goes under, the recovery and return of depositors’ money is guaranteed and they are either paid by the Government or through insurance the following day. Depositors do not play a role in bringing down a bank. It happens in other countries. As we deal with this Bill, we must propose an amendment to the Central Bank of Kenya Act to address the fate of Kenyan depositors if a bank goes down. Those are hard-earned deposits. Kenyans save their money. God forbid, I save a little money today then tomorrow The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}