Nairobi — Kenya’s private sector has singled out Central Bank of Kenya’s (CBK) reduction of cash ratio, payment of pending bills to contractors and local content input to help salvage women-run businesses.
In the ongoing tough macro and regulatory environment, Kenya National Chamber of Commerce & Industry’s is proposing CBK reduces the cash ratio from 5.25 percent to at least 3 percent to stimulate liquidity and lower interest rates, boosting private sector lending, among them women-led enterprises.
Speaking during a women summit, KNCC&I Chairman, Jimnah Mbaru said this reduction will help support government’s efforts the lower the cost of financing its domestic debt, with zero inflation, given the continued adequate rainfall and stability of oil prices.
"Among other things, this will immediately increase liquidity which will lower interest rates and boost private sector lending. To make this effective, lenders should be encouraged to follow this with an increase in the proportion of lending to women led-enterprises, "said Mbaru.
Mbaru also underlined the need for entities to clear pending bills, as it is affecting many businesses negatively with cases of job loss and closure of businesses increasing.
"We know failure to pay these bills over the last four to five years has led to the closure of a lot of women-owned enterprises leading to loss of jobs and affecting families across the country," he added.
He was speaking during the signing of a partnership with Stanbic Bank which will benefit women-businesses registered under the KNCCI.
On June 1st, President Uhuru Kenyatta directed all state ministries, departments and agencies to clear their pending bills which the parties failed to beat.
The Head of State said that pending payments have negatively affected many businesses, particularly those whose bulk of capital is now locked in non-payment, hence the need to clear them.
"To alleviate this situation, I hereby direct that all Accounting Officers pay and settle all pending payments that do not have audit queries, on or before 30th June 2019. Further, I direct the National Treasury to secure full compliance of this directive. I also call upon County Governments to follow suit," he stated during this year’s Madaraka Day celebrations at the Narok stadium.
This however failed in which the Head of Public Service Joseph Kinyua set another deadline of November 30, 2019, for the county governments and State Departments that have not cleared their pending bills to do so.