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{
    "id": 954785,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/954785/?format=api",
    "text_counter": 477,
    "type": "speech",
    "speaker_name": "Molo, JP",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": {
        "id": 13435,
        "legal_name": "Francis Kuria Kimani",
        "slug": "francis-kuria-kimani"
    },
    "content": "A lot has been said about capping interest rates. Now, the National Treasury proposes to lift this cap. Banks have been known to make a lot of money in profits. Why do they do so? I will go and deposit Kshs100 in a bank account. If I want that Kshs100 one hour later, I will have to pay a fee for just getting that money back. We get all this money sitting in a bank account to earn only two per cent interest or no interest at all. Banks take that money and give it to somebody for use and charge them 14 per cent per annum. Banks are saying that they are going to collapse if we continue with this interest capping. When other businesses in Kenya are collapsing and reporting losses and reduction in profits, and when companies at the Nairobi Securities Exchange (NSE) are giving profit warnings, the banks are expanding to Rwanda and other countries. They even have enough money to buy each other out like the buyout we had between the Kenya Commercial Bank (KCB) and the National bank of Kenya (NBK). Therefore, our role as Members of the National Assembly should be to protect SMEs, the electorates who deposit money today and get no interest on that account, but have to pay punitive interest rates if they want to go and borrow that money. Hon. Amos Kimunya was the Minister for Finance. He talked about how banks would go out and pitch tents during those days. I remember they would even come to Kenyatta University (KU) during my university days. They would pitch tents there to try to sell loans even to students. Now, for you to access a loan at the bank, they will probably even ask for your birth certificate and all manner of documents and not approve it at the end of the day. Why has it come to this? Banks have realised that they do not have to do an assessment of credit on you. They can just buy the Treasury Bills the Government is selling and the Treasury Bonds and they are going to get the interest they would get if they loaned you with the need to follow you further for you to pay. One of the things I am very proud about being a Member of this Committee is that we refused to remove this cap on interest rates. What if we get all these taxes and concentrate on making sure that the money we have is spent correctly? What if we say we are not going to introduce new taxes, but are going to have tax incentives to our businesses? This would ensure that we have hundreds of businesses registering instead of having one or two businesses register every day. They will realise that Kenya is a tax haven and they can operate here at a minimum cost. We will end up collecting more taxes because more businesses are going to make profits. As long as we are looking at our businesses and income with a microscope and looking for where to touch or tax, we will fail. People have come up with innovations in the digital market and we are saying that this is where we should get access to and tax. If we let businesses thrive, overall, through the economies of scale, we will collect more taxes that we will use to develop this country other than targeting to raise so much from fewer businesses with the companies ending up closing. As I finish, we need to have consistency in our laws. Someone who comes to open a business in Kenya should know that, for sure, the taxes they are going to pay for the next five years are X or Y. It should not be a different tax rate every year or a different tax bracket this year, next year you are tax exempt and zero rated in the next. It makes our country unsuitable and unattractive to business people and investors. With that, I end my contribution."
}