President Uhuru Kenyatta addressing the press at state house on 21/11/18-[Photo: Beverlyne Musili,Standard]

President Uhuru Kenyatta has urged banks to be more innovative in devising ways of lowering the risk of lending to small businesses.

Uhuru said yesterday the Government would work with banks to this end by training small and medium-sized enterprises (SMEs) to better manage their books as well as coming up with alternatives for collateral where borrowers have no fixed assets such as land.

“We cannot just say the only secure borrowers are large companies and Government. You must be innovative, you must begin to look at new ways and we are willing to support you to do that,” he said during the launch of the new generation currency in Nairobi.

The President, whose family owns Commercial Bank of Africa that is in merger talks with the NIC Bank, said the State would back efforts to loan those who have no land as collateral.

“We have a lot of young and very innovative people who may not have title deeds but have great ideas. We can take on jointly the responsibility of training them on how to manage their accounts,” he said.

Uhuru said his administration would work with the financial sector to stimulate lending to SMEs and farmers.

Since the enactment of the rate capping law in September 2016, banks have reduced lending to SMEs and instead focused on the Government.

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