State to restructure and recapitalize Post Bank

Written By: Judith Akolo

The government plans to restructure and recapitalize Post Bank to help the parastatal achieve its target of mobilizing private savings as well as compete with other players in the financial services sector.

Public Investment Director General Esther Koimett says this will help the country tap the high financial inclusion, which is currently at 80 percent to increase the ratio of savings that stands at a meager 17 percent to the Gross Domestic Product.

Kenyans are yet to take advantage of the interest rate capping law that offers depositors more interest to grow their wealth through savings.

With the savings to GDP ratio currently at 17%, financial sector players feel the interest rate cap law has not achieved the desired results among them including increasing private savings.

Plans are underway to review the interest rate capping law that has seen banks register a dip in earnings while at the same time addressing public concerns about exorbitant lending rates.

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Koimett says plans are underway to restructure and recapitalize the Kenya Post Office Savings Bank to enable it compete effectively on the financial market while at the same time drive the growth in private savings.

The conference is discussing among others; the impact of interest rate capping law in Kenya, cyber security, alternative delivery channels and changing customer needs.

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