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"id": 959819,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/959819/?format=api",
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"type": "speech",
"speaker_name": "Nambale, ANC",
"speaker_title": "Hon. Sakwa Bunyasi",
"speaker": {
"id": 2511,
"legal_name": "John Sakwa Bunyasi",
"slug": "john-sakwa-bunyasi"
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"content": " Thank you, Hon. Temporary Deputy Speaker. I stand with my friend Jude Njomo. We have had detailed debate. Even though we can share a drink, we have different perspectives on this one. I support the idea that we should lower costs to small borrowers so that they can finance the businesses they want to do. But, as a stance of Parliament in public policy, we should put the Government‟s feet to the fire. One, on the fiscal policy side, which is the expenditure side, the level of actual effective deficit is much higher than what comes to Parliament. Why? They overstate the amount of revenue they will raise then they have a big shortfall, so they must raise the money by domestic and external borrowing. People have mentioned the disadvantage of the Government borrowing domestically. In this particular case, instead of raising interest rates since they are capped, all they need to do is to fill the gap that is left by the small borrowers who will not be able to access credit because banks will not lend to them. They do not lend to them because they can make the same money from big borrowers. So, one of the things we must do is to rein in the amount the Treasury is spending by borrowing from these banks. We must confront them directly. We must not celebrate when we get trillions plus budgets and claim that they are the biggest in East Africa. It is the biggest disadvantage. That is one area. The second area, people have quoted the Federal Reserve Bank and the Bank of England. How many times has the CBK Governor come to Parliament just to brief us on monetary policy? How many times has that been demanded by, say, the finance committee, so that they can hear from him what is going on in terms of discussions around liquidity in the economy? We do not. We only call him in when there is a crisis. He needs to be briefing this House no less than quarterly, perhaps even monthly, depending on what the movements are so that the House is abreast of the movements that are going to be made. If the banks were sitting on too much money that the Government is not taking, interest rates would come way down. Three, we are quoting countries that have interest rates of 2 per cent and less. One time, Japan had near zero interest rate, effectively much less than 1 per cent a year. There are many things these countries do that drive the interest rates down. However, here we expect that our SMEs will grow by borrowing from the commercial banks. There are many instruments that we have now abandoned, and we have discussed them in this House and in committees. These instruments include special funds that the Government can put aside, even through banks, to lend at agreed interest rates, away from the monies that the commercial banks raise through mobilisation of deposits. India has had that very successfully. We cannot put all of our many policy requirements on interest rates. It will not work. Four, an interest rate is part of the price of money. But what banks do, if you pressurise the interest rates, and somebody has said that here, the non-interest revenues arise, the origination fee, the application fee and so on. What I think we should have done – and I have discussed this with my friend Hon. Jude Njomo earlier, not today – is to have completed the process of disclosure. Banks had been moved to disclose the levels of interests they charge but it had not included all the elements of the charges. If they are raising money, origination fee, 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."
}