The amount of credit lent to Small and Medium-sized enterprises (SMES) by financial institutions rose by 7 percent in the last one month, even as the economy adjusts to the repeal of the interest rates cap late last year.
This is according to National treasury adviser Geoffrey Mwau who says the improvement is expected to continue throughout the year.
“From the numbers that we are seeing there is an improvement in credit to the SMES, according to data from last month the improvement is up to 7 per cent,” he stated
At the same time, Central Bank of Kenya (CBK)Deputy Governor Sheila Mbijiwe has reiterated the importance of having a stable and inclusive financial sector for economic development of a country.
She added that there is a need to have sound financial systems that build and connect savings to investments, as it will create opportunities for scaling up financial inclusion through ease of credit access and resolution of debt.
“To achieve transformation and economic growth, there is a need to have sound financial systems that build and connect savings to investments. This will create opportunities for scaling up financial inclusion through ease of credit access and resolution of debt,” Mbijiwe said.
She highlighted the role of credit in development locally and even at a continental level cannot be overemphasized,
CBK deputy governor stated the repeal of the rate cap, will help to improve scoring access of credit especially for the Micro, Small and Medium Enterprise (MSME).
“After the repeal of the rate cap, we are happy to assess how we can use scoring to improve access of credit especially to the MSME sector,” Mbijiwe said.
The two were speaking during the launch of the 5th Africa Credit Information Sharing in Nairobi.
The conference comes at a time when the Central Bank of Kenya has issued the Kenyan Banking Sector Charter that places the CIS mechanism at the centre of efforts to improve loan pricing and transparency in Kenya’s credit market.
Other speakers included Chief Executive Officer, Credit Information Sharing Association of Kenya (CIS Kenya) noted the robust of credit infrastructure is key to solving some of the perennial financial sector challenges such as high cost of credit and financial insolvency.
“A strong credit infrastructure will enable efficient and effective access to finance, financial stability and socially responsible economic growth through credit reporting, secured transactions and collateral registries and insolvency and debt resolution,” he said.