President William Ruto has called on commercial banks to lower loan interest rates from the current average of 14.39 per cent to more affordable levels for Kenyans and businesses.

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Ruto on Thursday, September 17, said commercial banks' lending rates remain too high despite a reduction in the Central Bank Rate (CBR), which currently stands at 8.75 per cent.

Speaking at the Central Bank of Kenya's (CBK) 60th Anniversary in Nairobi, the President said the benefits of economic stability should now reach the wider economy.

“The central bank rate now stands at 8.75 per cent. The lending rates have declined. But at 14.39 per cent in July, credit remains expensive for many Kenyans and their businesses,” he said.

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“The gains of stability must now reach the real economy through more affordable and accessible credit. Kenya does not need strong banks merely for the sake of having strong banks,” Ruto added.

Ruto reiterated that lower borrowing costs were necessary to help farmers, businesses and young entrepreneurs access cheaper loans to expand their activities and create jobs.

In his speech, he challenged financial institutions to ensure savings mobilised from Kenyans are channelled into productive economic activities rather than remaining disconnected from the wider economy.

“Kenya does not need strong banks merely for the sake of having strong banks. Our financial institutions must become better at converting Kenyan savings into Kenyan production,” Ruto said.

The President's remarks come about a month after the regulator published average lending rates across all commercial banks in the country, with the cost of borrowing ranging from 10.59 to 19.06 per cent.

According to the CBK report, major commercial banks kept their lending rates stable or reduced them slightly as they remained cautious about increasing loans to individuals and small and medium-sized businesses.

📰 Source: Kenyans.co.ke