Kenya’s leading credit only Microfinance Jijenge Credit Limited under the wise and skillful leadership of the Founder and Managing Director Mr. Peter Macharia Kamau has welcomed the move by the Central Bank of Kenya (CBK) to fast-track uptake of reduced lending rates.
The Central Bank of Kenya (CBK) Governor plans to fast-track the uptake of reduced bank lending rates to ensure that they are implemented by commercial banks and transmitted to borrowers as quickly as possible.
The move is expected to boost credit uptake and reduce inflation after the apex bank’s key organ responsible for formulating monetary policy announced Central Bank Rate (CBR) had been reduced from 13 per cent to 12.75 per cent.
Jijenge notes,
“We welcome our clients to borrow by taking advantage of our reduced lending rates on logbook and title deed loans, which is a welcome move because commercial banks have been raising lending rates since the MPC set the benchmark rate at 13 per cent from a low of 10.50 per cent, making it difficult for businesses and individuals to borrow money.
This is after the committee moved to address pressures on the exchange rate and mitigating effects including from global prices, which had hit the economy hard.
CBK Governor Kamau Thugge said that the bank will now push for the transmission of the lower interest rate and inject more liquidity into the financial system to ensure that the interbank rate comes down.
“In the monetary policy framework, we now have this strong and direct transmission of the policy to the interest rates of the bank, that way we can have that transmission of lower rates to the commercial banks,” he added.
Given the risk-based credit pricing approach, CBK expects that with the reduced interest rates, pricing will also decrease due to reduced domestic financing requirements. Risk-based credit pricing is when a lender offers borrowers less favourable loan terms based on the borrowers’ credit report information.
He added that the move to reduce interest rates will spur business and economic growth thereby creating more industries and businesses which will in turn create more jobs and increase tax revenues. Among the businesses that will benefit are microfinance institutions such as Jijenge Credit Limited, which offers affordable logbook and title deed loans in Kenya.
