From left: Dr. Chris Kiptoo is the Principal Secretary, National Treasury, Mrs. Nasim Devji, DTB Group CEO and Mr. Murali Natarajan, Managing Director & CEO DTB Kenya during the DTB 5th Economic and Sustainability Forum.
By Aoma Keziah,
Diamond Trust Bank (DTB) has forecast an increase in lending to individuals and small businesses as Kenya’s economy stabilises and growth becomes steady after the difficult times encountered last year.
In his remarks, chief guest of the event Dr Chris Kiptoo, the Principal Secretary for the National Treasury, said he is optimistic that the current momentum will continue, and that Kenya would continue to be in the International Monetary Fund programme to maintain stability.
“When I started, it was very hard, and I had many sleepless nights. Now the worst is over, but the future is brighter. We have a resilient economy, diversified, and that’s how we come out of shocks. The focus for the Budget in the next financial year would be on agriculture, exports of tea, edible oil, cotton, leather, dairy, natural resources, building materials, and the blue economy.” He explained.
To boost lending the private sector, he said that the Credit Guarantee Scheme would be transferred to a government-owned company to keep it going, and that it’s currently an arrangement between the government and seven banks where the government commits to pay a portion of the outstanding amount in the case of a default.
The Principal Secretary continued to say that said the committee verifying pending bills has so far approved the payout of KSh236 billion of the more than KSh600 billion, when the Kenya Kwanza administration took over.
“Of this amount, the bulk would go to small businesses that are suppliers and to road contractors. Kenya would continue to be in the International Monetary Fund programme to maintain stability.” Added Dr. Kiptoo .
The implementation of the Single Treasury Account, e-procurement policy, zero-based budgeting, and the working with Public-Private Partnerships would be prioritised as the Government looks to increase spending on development.
DTB Kenya Chief Executive Officer Murali Natarajan said the banking sector’s credit are also likely to double in the next decade from the current $32 billion if the current momentum is maintained, noting that the immediate impact will be felt by individuals and small businesses.
“When I look at the resilience of the economy and the track record of having dealt with so many challenges, that gives me immense confidence that I feel very confident about going forward. When I look at the MSME segment, which is partly informal and partly formal, going forward and as banks start focusing on retail and SMEs, I feel that there is a big opportunity there. Working with our team, with the guidance of the board and the Group CEO, we are pretty confident that focusing on the segments, like agriculture, retail, MSME and making it more small ticket and mass, we should be able to double our balance sheet in about three to four years.” He remarked.
He also pointed out his forecast is supported by the stability of the Kenyan economy following interventions to reduce interest rates and the effect of plentiful rains and the reduction of fuel prices.
“I congratulate the Government and the Central Bank of Kenya for steering the ship through difficult times last year. The macros look stable, interest rates are coming down, and the flow of remittances from Kenyans abroad continue.” Mr Natarajan continued to say
DTB projects economic growth at 5 per cent this year, but with challenges and risks to remain.
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