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{
    "id": 959684,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/959684/?format=api",
    "text_counter": 88,
    "type": "speech",
    "speaker_name": "Kiambu, JP",
    "speaker_title": "Hon. Jude Njomo",
    "speaker": {
        "id": 1784,
        "legal_name": "Jude L. Kangethe Njomo",
        "slug": "jude-l-kangethe-njomo"
    },
    "content": "One of the terms said to be ambiguous and vague is credit facility. In this law, the terms „credit facility‟ and „loan‟ are used interchangeably. The term „credit facility‟ has not been defined in law, but the term „loan‟ has been defined in law to mean „loan includes any advanced credit facility, financial guarantee or any other liability incurred on behalf of any person‟. The court wants us to define the term credit facility using proper language. In this Bill, we have done that by removing the word „credit facility‟ because the word „loan‟ takes care of credit facility and this is better language. The other problem is the four per cent CBK rate set and published. The court found it unclear whether we are moving over, above or below. Also, the rate being set is not properly documented because there are several rates in CBK like the CBR, the Kenya Bankers Reference Rates (KBRR) and others. So, we are required to be very specific and precise to avoid ambiguity. The interest of four per cent was also found not to be very precise because we did not state whether we were charging four per cent per day, month or annum. We are supposed to clear this. The next amendment begs to answer the question on what base rate is applicable. The court held that the words Central Bank rate set and published by Central Bank was imprecise, uncertain and fell short of what would be termed as a good piece of legislation that is easily understood by the common mwananchi . This is because this provision does not point out the exact base rate we are basing on and we have done this correction. Another issue is whether the sanctions and penal provisions in the Statute are necessary for emphasising compliance. The court ruled that by only penalising the bank, we are being discriminatory. So, we were left with two alternatives, either to remove the penalties or penalise all the parties in the agreement. If we remove the penalties, then there will be no motivation for people to obey the law. The only option we are left with is to penalise both the borrower and lender if they enter into an agreement that goes outside this law. I have proposed to amend this provision in order to retain the existing penalty, but for it to apply to all offenders, hence removing the discriminatory aspect. This is what necessitated this law and we have done the necessary corrections as required by law. But it is worth noting that this might not be the last war we will fight with banks. I can only describe what banks are doing today as State capture. If you are tech-savvy, you can search on Wikipedia where State capture is defined as the way formal procedures such as laws, social norms and Government bureaucracy are manipulated by private individuals and firms so as to 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."
}