Private sector to feel the pain as State plans to borrow more

Kenya Bankers Association Chief Executive Officer Habil Olaka (left) share notes with KBA Research and Policy Director Jared Osoro at the launch of a report on the interest capping law effects on micro and small enterprises. [David Njaaga, Standard]

Bankers have warned that increased government borrowing from the domestic market will crowd out the private sector and hurt small businesses.

In a new report on the impact of Covid-19 to the country’s financial sector, the Kenya Bankers Association (KBA) has cautioned that increased domestic borrowing by the Government could reduce credit available to households and businesses, delaying economic recovery.