Rotich hits out at banks over high cost of lending

National Treasury Cabinet secretary Henry Rotich. FILE 

By CHARLES MWANIKI

Treasury Cabinet secretary Henry Rotich has hit out at banks for maintaining high operating costs, which are then passed on to borrowers in form of steep lending rates.

Mr Rotich said cost-cutting initiatives such as ATM infrastructure sharing could help banks lower their expenditure, and by extension the cost of loans.

Kenya’s ranking in terms of affordability of financial services in the annual World Economic Forum Global Competitiveness report for 2013 dropped to position 68 from 54, meaning access to financial services is becoming more expensive compared to other countries.

A recent Financial Sector Assessment Programme study found that interest rate spreads in Kenya are driven in large measure by overheads.

“There is need for innovative solutions to address overheads such as sharing of infrastructure ” said Mr Rotich in a speech read on his behalf by Investment Secretary Esther Koimett during the launch a new National Bank branch at Sameer Business Park Wednesday.