Jubilee blunders that sent interest rates into the sky

Treasury Cabinet Secretary Henry Rotich

Experts applied pressure on the Treasury to review its economic policies to cushion Kenyans from the high cost of living, especially after soaring interest rates that have increased the burden on borrowers.

With government borrowing from banks at 20 percent interest rate, individuals seeking loans are forced to pay back at a rate of between 24 and 28 per cent. And because of the good returns banks get from cash loaned to the Government, most banks deny individuals and companies money for development and other expenditures and opt for the high-yielding T-Bills and Bonds that are risk-free and easy to manage.