Entry Instance

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

{
    "id": 959797,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/959797/?format=api",
    "text_counter": 201,
    "type": "speech",
    "speaker_name": "Nominated, ANC",
    "speaker_title": "Hon. Godfrey Osotsi",
    "speaker": {
        "id": 13172,
        "legal_name": "Godfrey Osotsi",
        "slug": "godfrey-osotsi"
    },
    "content": "the Banking Act. The judgement said that this particular section is unconstitutional and discriminatory. The amendment by Hon. Jude Njomo is timely. It is a perfect amendment Bill to resolve the issue of interest capping. We should be aware that Parliament has been given 12 months to make the amendments and have the law in place before 14th March 2020, which is not very far from now. This amendment Bill will actually deal with the problem of what some Members have called abnormal profits. In my case, „abnormal profits‟ is an understatement. Banks were making astronomical profits before interest rates capping came into place. So, this is a very welcome Bill. The argument of removing interest rates capping so that they make loans available to SMEs does not hold water. I agree with the Departmental Committee on Finance and Planning. I saw they rejected that argument from the Cabinet Secretary for the National Treasury and Planning. The Government should not be seen to be pushing the interest of banks. That argument, in fact, gives us the reason that we need to have the capping in place. I agree with Hon. Wakhungu that this is one Bill we need to pass and make sure that it goes through all the stages very quickly, if possible this week. We need to have it passed in the Second Reading, Committee of the whole House and then taken to the President for assent. We have seen that the Finance Bill proposes to delete Section 33 of the Banking Act and basically take us back to the regime when we did not have interest capping. When time comes for us to debate the Finance Bill, 2019, we should reject that amendment. If need be, when and if the President sends it back with reservations, we should be able to raise the two-thirds majority required to shoot it down because Kenyans have continued to suffer because of high interest rates. In 2016, when the law was passed, there was a lot of misinformation emanating from banks. They told Kenyans that the new law would make it very difficult for them to recover costs. They also told Kenyans that this law will promote slow growth in the banking sector. They told Kenyans that it would reduce service delivery in rural areas. They told Kenyans that it would lead to mass exit from the market. Nowadays there is a bank in every village market, in fact, more than one bank. So, those were lies. In fact, interest rate capping has had very positive effects on the economy. For example, if I may demonstrate, the number of non-performing loans has generally decreased across all economic sectors because people are able to pay back the loans. It is because of the low interest rates. That is something positive to the economy. Even banks are still making profits because they have devised other ways of raising money. They are still making profits because they have reduced general expenses that were incurred on auctioneer fees and non-performing loans. They have had those expenses reduced and that has generally affected their level of profitability. We have also seen an upsurge in the non-interest income for banks. In fact, non-interest income for banks has gone higher than the interest income. This is because banks have come up with other measures to increase non-interest income through charges and fees. They even charge loan insurance on overdrafts. And they also charge extra fees on government securities. So, it is not true when they tell us that they are not making money. They are misleading us."
}