Parliament scolded for drafting laws hampering economic development

Equity Bank chief James Mwangi has scolded parliament for drafting laws that hamper economic development.

Mwangi says attempts by parliament to force commercial banks to lend to small and medium enterprises will stifle the growth of the banking sector.

Parliament is proposing to implement a law that will force commercial banks allocate at least 10 percent of their loan book for small and medium enterprises.

SMEs have borne the brunt of the interest rates capping law that came into force in October 2016.

Credit to SMES dropped by 10 percent in 2017, with banks blaming the drop to the interest rate law

Equity bank chief James Mwangi says, parliament is increasingly frustrating the private sector by passing laws that threaten the growth of the industry.

On Thursday parliament failed to repeal the rate capping law despite heavy lobbying from the lenders and the International Monetary Fund.

Lending to the private sector fell from 9.3 percent in 2016 to 2.4 percent in 2017, the slowest growth in ten years.

Mwangi spoke during the launch of Mkey, an application by Finserve that allows customers to carry out multiple services like borrowing, shopping, fueling among other services using the app.

Finserve is a financial technology arm of equity group.

  

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