Ruto presidency starts with huge sense of urgency
The Presidency of William Ruto has got off to a flying start. The new president is a man in a hurry. He probably recognises the nexus between the limited time of his five-year term, the huge challenges bedeviling Kenya, resource constraints, the huge expectations of Kenyans, and the promises he made.
Appropriately, his presidency has started off by giving a huge boost to the so-called hustlers.
Ruto announced that at least 4 million people blacklisted by the Credit Reference Bureaus (CRBs) would be removed within a month. This will give a huge swathe of Kenyans a new lease of life. Despite their protestations, the truth is that blacklisting by CRBs has been the equivalent of a financial death sentence. Banks and other players in the financial sector have used CRB as a weapon to bludgeon borrowers. Indeed, banks and other financial players simply look up the CRB status of a borrower and shut him out if he is blacklisted. Banks merely pay lip service to the so-called borrowers’ positive information.
It is time to restore sanity in the CRB process. Indeed, this reform needs to go further. Remove the requirement that job applicants must have CRB clearance.
Even institutions such as the Higher Education Loans Board (HELB) blacklist students who graduated but have no jobs on CRB. Such students are asked for clearance from both CRB and HELB when applying for jobs, completely locking them out of the country’s body politic. At what point did Kenya lose its reasoning capacity?
The President’s body language seems to have inspired a radical rethink by Kenya’s body politic. Astoundingly, Safaricom, KCB Bank and NCBA- the partners managing the Fuliza credit scheme- announced a 40 per cent reduction in interest rates, as well as a grace period of three days.
Absolutely incredible! The 40 per cent rate cut represents billions of shillings annually taken from the cashflows of individuals and businesses to pad the already abnormal profits that these banks and the telco enjoy. That interest rate cut simply proves what Kenyans have been crying about for years- that bank interest rates are unreasonable, and too high!
The president wants to see single digit interest rates for small and medium sized businesses. The day that happens, the Kenyan economy will boom, and banks will see huge growth. Their loan books will grow exponentially, as borrowers will have little problem repaying their loans. A win-win!
Indeed, the president is ready to put his money where his mouth is, and has promised the banking industry that the Government is ready to underwrite the risks they will take on to lend at this level.
He has also signalled his determination to engender a saving culture in Kenya. He has promised to roll out a scheme where the savers at the bottom of the pyramid get a shilling from government for every two shillings they save with the National Social Security Fund (NSSF), subject to a maximum individual saving of Sh6,000. Again, this goes down to Kenyans long forgotten by a system designed to lock them out by default.
However, NSSF will have to undergo drastic restructuring if the expected cash deluge it will start receiving does not turn into a cash cow for corruption cartels as has been the tragedy of this institution.
Along with this, a determination must be made on what to do with the billions of shillings worth of contributors’ contributions that have apparently no owner because of reconciliation issues. This money cannot continue being held in abeyance as corruption cartels keep playing ping pong with it. Let it be distributed to existing beneficiaries, both present and future. And stop all real estate development by NSSF for all time!
These early moves by the president proves that it is possible to build a country that seeks to put the ordinary Kenyan at the centre of the country’s development efforts. A caring country. A country that puts Kenya first, ‘Kenya Kwanza.’ To borrow the campaign exhortation, it can be done (Inawezekana). It is time to re-imagine this country.
