President William Ruto has challenged Kenya’s banking sector to turn the country’s improved financial stability into cheaper and more accessible credit for households and businesses.
The President said high borrowing costs continue to constrain investment, entrepreneurship and job creation despite an improving economic environment.
“Kenya does not need strong banks merely for the sake of having strong banks. We need strong banks capable of financing a strong economy,” President Ruto said on Thursday evening during celebrations to mark the 60th anniversary of the Central Bank of Kenya (CBK), at the Institute of Monetary Studies in Nairobi.
He urged banks and other financial institutions to lower the cost of credit and expand financing to small businesses and ordinary Kenyans, arguing that financial stability should translate into greater economic opportunities and improved livelihoods.
“Our financial institutions must become better at converting Kenyan savings into Kenyan production, including financing farms and factories, businesses and infrastructure, technology, exports, and enterprises,” he said.
President Ruto noted that lending rates have declined, with the average lending rate standing at 14.39 per cent in July, but said the cost remains too high for many households and businesses.
The call comes as the banking sector operates in an environment of easing monetary conditions following a period of tight policy aimed at containing inflation and stabilising the shilling.
Ruto credited CBK with helping stabilise the economy after his administration took office in September 2022 amid high inflation, elevated food and energy prices, exchange-rate pressures and looming external debt obligations.
“The Central Bank tightened monetary policy as inflation and exchange rate pressures intensified. Government confronted external financial challenge, including the 2024 Eurobond maturity, while pursuing fiscal and structural measures to strengthen the economy,” he said.
The President said the CBK’s response to the economic pressures demonstrated the importance of strong and independent institutions in maintaining financial stability during periods of volatility.
“Strong institutions matter most when circumstances are difficult. The independence of the Central Bank is therefore not an abstract constitutional principle. It is Kenya’s economic strength,” he said.
Ruto also called for deeper financial integration across Africa to increase the continent’s capacity to finance its own development.
He said African countries should tap the estimated $4trilion (Sh518 trillion) in financial assets held across banks, pension funds, insurance companies and capital markets.
“Our ambition is not to retreat from the global economy, but to engage it from a position of greater financial strength while mobilising more of our own capital for our own development,” he said.
The President’s remarks place greater pressure on financial institutions to ensure that the benefits of macroeconomic stability are reflected in the cost and availability of credit, particularly for productive sectors of the economy.
The CBK has been at the centre of Kenya’s monetary and financial stability framework since its establishment in 1966.
Its 60th anniversary celebrations brought together CBK Board Chairman Andrew Musangi, Governor Kamau Thugge, Association of African Central Banks Chairman Yvon Sara Bangui, members of the diplomatic corps and senior government officials.
