2 ways Kenyans would benefit from licensing of new banking institutions

2 ways Kenyans would benefit from licensing of new banking institutions
  • The Central Bank of Kenya has lifted ban on licensing of new banks after it announced plans to license 2 new banks
  • In 2015, CBK halted licensing of new banks saying it needed time to enhance its supervisory capacity following the collapse of Imperial and Dubai bank
  • The new lending institutions enter the market at a time when interest rates have been lowered to just 4 per cent above the Central Bank Rate of 10.5%

 

  1. Employment opportunities

Thousands of Kenyans are set to secure job opportunities after the Central Bank of Kenya (CBK) yesterday announced that it would soon finalize the licensing of DIB and Mayfair Bank.

“The Central Bank of Kenya (CBK) announces its intention to finalize the processing of license applications for two institutions as a first step to lifting the moratorium on licensing of new commercial banks,” CBK said in a statement.

  1. Access to cheaper loans

Borrowers will have access to cheaper credit once the two lenders kick-start their operations.

The regulator says the entrance of DIB Bank and Mayfair Bank would not only expand the range of lending institutions in Kenya’s banking sector but also underscore the country’s growing stature as a regional financial hub.

“The entry of these banks on the fulfillment of all the pre-licensing conditions will expand the range of banks’ business models and underscore Kenya’s growing stature as a regional financial services hub,” the regulator said.

READ ALSO: 69 per cent of banks hold interest rates steady, Central Bank survey reveals 

The lifted ban on licensing of new banks comes barely two years after the CBK halted licensing of new lending institutions which came into effect in November 2015.

The restriction on licenses was intended to give the regulator time to enhance its supervisory capacity following the collapse of Imperial and Dubai Bank.

The new lending institutions enter the market at a time when interest rates have been lowered to just 4 per cent above the Central Bank Rate of 10.5%.

A recent World Bank report showed that access to credit facilities would help alleviate poverty by creating thousands of direct and indirect jobs.

 

 

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