Safaricom, NCBA, KCB tasked to form loan scheme for SMEs with interest rates below 10pc daily

Kenya's President William Ruto tasked Safaricom, NCBA, KCB to form loan scheme for SMEs with interest rates below 10pc daily
[Kelly Ayodi, Standard]

President William Ruto wants mobile service provider Safaricom, NCBA Bank and Kenya Commercial Bank (KCB) to introduce loan schemes for Small and medium enterprises.

Speaking in Nairobi on Wednesday, the head of state directed government officials to see to it that his proposals are effected.

"The government of Kenya, and I have the nominee for Treasury [Njuguna Ndung'u] and ICT [Eliud Owalo] here, these two gentlemen will be working with you in the financial fin-tech space because we want to work on credit especially for our small, micro and medium enterprises.

That is the space where we have the largest opportunity. That is the space that employs almost 80 per cent of our population and yet they are constrained by access to credit," said Ruto.

Dr. Ruto, who during his campaign period emphasized SMEs, proceeded to inform the lenders that the cry was coming from Kenyans with whom he had interacted.

"Shiko, in Ruaka market, and her team borrow 1 million shillings every day and they pay interests high as 10 per cent per day which translates into 3,600 per cent per year. Shiko and her team don't want free money.

They are telling me; can we pay the same interest that big companies are paying. That's all they are asking and I don't think it's too much to ask?" Ruto posed.

The President wants a product developed where SMEs will borrow at interest rates below 10 per cent daily.

"Progressively, and the assignment I'm going to give to these two gentlemen, is to work with you in the private sector to develop a product where Shiko, a 'mama mboga' in Ruaka and a boda boda person can also have access to credit at single digit rate.

I am willing to work with you in a public-private engagement so that we can mitigate some of the risks that come with lending to that category of Kenyans," said Ruto.

This, according to the president who campaigned on a bottom-up economic model, will enable Kenyans borrow and double their businesses.

Dr. Ruto says the Hustlers Fund will act as security.