Standard Chartered Bank has today reiterated its commitment towards supporting lending to the private sector particularly the SME sector which it considers the backbone to building sustainable growth of the economy. The bank in 9 months to September 2019, injected Ksh 6.3 billion in direct and indirect lending to Micro, Small and Medium enterprises in the country, supporting more than 8,000 such enterprises in the process.
Since 2016, the industry has experienced suppressed Private Sector credit owing to the interest rate cap law passed at the time. As such, there has been a huge financing gap with most SMEs losing access to credit. The repeal of the interest rate cap is a step in the right direction as it allows for market forces to determine interest rates and to price for risk appropriately.
Commenting on the repeal of section 33B of the Banking Act, Standard Chartered Bank CEO, Mr. Kariuki Ngari reassured clients and the public that they will not see a spike in interest rates or any form of predatory lending practices from Standard Chartered.
“Over the last couple of years, we have realigned our business model and massively invested in technology to derive efficiencies which has enabled us share the savings with our clients,’’ he said.
As Standard Chartered Bank, we hold ourselves to a high standard and commit to act responsibly by doing right by our clients and the communities in which we operate to fulfil our purpose of Driving Commerce and Prosperity through our unique diversity.
Impact on new and existing facilities
The Existing loan facilities will not be repriced following the repeal of the interest rate cap. These facilities will continue under the existing loan agreements. We are finalizing plans to roll out a fully-fledged Risk – based pricing model for new facilities which we will announce in due course.