Kenya's deputy president urges banks to cut interest rates

Kenya's Deputy President William Ruto on Friday called on all financial institutions in the country to lower interest on their loans to enable many Kenyans to access the loans easily.

Ruto noted that the country's economy was growing, adding that it was advisable for the banks to lower the rates and have more customers going for the loans than keep the interests high and have few customers applying for the loans.

"I urge all the remaining financial institutions that have not yet lowered their interests in response to the resurgent economy, do so because it is better to have a bigger base of customers with the low rates than few customers with the very high interests rates," Ruto said in Kericho in northwest Kenya.

Ruto's remarks came after banks in October gave borrowers 30-day notices, indicating their intention to increase lending rates.

Some borrowers would have had to pay loan interest rates of as much as 30 percent largely on account of the high cost of money driven by increasing government borrowing.

In the last two months, the government's growing appetite for debt saw the interest rate on short-term borrowing papers rise to highs of 22 percent.

On Oct. 22, the 91-day Treasury Bill peaked at 22.5 percent, with the rate at which banks were borrowing from each other hitting 25.84 per cent.

Ruto at the same time said the government had cut down on unnecessary expenditure to help in recharging the economy, noting the recent austerity measures adopted by the government had started bearing fruit as exemplified by the falling bank interest rates.

"I would like to commend the banks that have lowered their interests rates as this indeed will go along way in growing individual economies and that of the country economy at large," he added.

Ruto condemned tribalism and its ills saying it was the greatest cancer that all Kenyans must strive to eradicate.

The DP said Kenyans and especially leaders should remove tribalism in all the endevours by espousing issues based on ideologies and policies and not on tribal consideration.

"As leaders we cannot talk about uniting the country and at the same time stick to our tribal cocoons. We should look at the bigger picture and leave our tribal cocoons for the greater good of the country," he added. Endit