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YEDF Chairman Mr. Ronnie Osumba welcomes the move by the President to curb new interest rates by signing the Banking (Amendment) Bill, 2015 into law. Osumba said the law will open unprecedented opportunities for young people, especially those in business or planning to get into business.
According to Mr. Osumba the President’s act is consistent with his promises and initiatives to expand economic opportunities for the Kenyan youth. The law expected to enhance access to cheaper loans by the youth, cushion youth owned enterprises from being chocked by high interest rates and removes the guillotine of auctioneers that has always hovered over their heads.
"The move by President Uhuru Kenyatta, will see more youth borrow from banks to grow their businesses and to create employment for themselves and for others.” At the Youth Enterprise Development Fund, we have capped our business expansion loans to a maximum of Kshs.2 million, owing to limited resources in comparison to the high demand for our services.
Many of the youth who wish to borrow more than this limit have often turned to the banks. Others prefer to borrow from banks because of the special relationship they have built with them over time. Some of these youth have ended up closing their enterprises because their businesses were not sustainable with the high interest rates they had to pay.”
The Chairman further said, the Youth Fund has in the past partnered with several financial intermediaries to complement its financing portfolio. While this has helped benefit more youth, the interest rates charged have sometimes made it unsustainable.
Going forward, we will continue to explore such partnerships and hope that, with this new law, the interest rates will be more favorable to youth owned enterprises. I call upon our youth to take advantage of this new opportunity and to take their space in the economic growth of this great nation.
The law assented into an act by the president last week, requires a bank or financial institution, to disclose all the charges and terms relating to the loan before granting a loan to a borrower. The law also sets the maximum interest rate chargeable for a credit facility in Kenya at no more than four per cent, the base rate published and set by the Central Bank of Kenya.