When customers make payments, they are unlocking the value they have stored in their pockets, wallets or accounts. Key to their ability to unlock that value is the third-party acceptance of both the “value” they are transferring, and the means by which they want to transfer it. The utility of any payment convention thus depends first and foremost on the depth and breadth of its adoption in its intended universe. Beyond reach, a modern payments convention needs more; it needs supporting mechanisms that are efficient, accessible, interoperable; safe, reliable and fast. In most modern domestic markets only one form of…
Author: NBM CORRESPONDENT
BY David wanjala We revisit the interest rate cap topic following the proposal by the National Treasury Cabinet Secretary, Mr. Henry Rotich, in the Budget reading for 2019/20 fiscal year, to repeal Section 33B of the Banking Act, which capped interest chargeable on loans at 4.0% above the CBR rate. As highlighted in the Finance Bill 2019, the proposition to repeal the interest rate cap stems from the adverse effects the law has had on credit access, especially by the Micro, Small and Medium Enterprises (MSMEs), which consequently has detrimental effects on economic growth. In 2018, the Parliament rejected a…
BY DAVID NDII In October last year, Uhuru Kenyatta fired a broadside at imports of fish from China: “The Finance bill has passed but we can think outside the box. We might as well say the fish imported is bad then we lock it. There are many ways the government can work if we really intend on serving our people.” The trick backfired. The ban was imposed in November and lifted two months later following what was reported as a “biting shortage”. Had he taken a quick peek into the Economic Survey – the Government’s annual statistics report that should…
BY BOSIRE NYAMORI Interpretive challenges are a salient feature of tax legislation. The case of Kenya Revenue Authority v Republic (Ex-parte Fintel Ltd) (KRA v Fintel), illustrates problems that come up when precise meaning of words in a statute is uncertain and murky. The source of the problem was the word “paid” in sec 2 and phrase “upon payment” in sec 35(1) of the Income Tax Act. At issue is whether the obligation by the payer of interest to deduct and remit withholding tax is based on the accrual principle or the cash basis. The Court of Appeal (COA) held…
BY KEVIN MOTAROKI What is your last great act as chair of the Board? That would be cleaning up the Fund – and therefore, its image – by instituting proper structures to facilitate its mandate and operations. I, however, wouldn’t peg that on a specific activity or item for, I think, it has been a continuous process. It is a team effort, of course. We have documented our achievements, challenges, lessons and recommendations in a report, the YEDF End of Term Report, 2019. It is an honest assessment of the Board’s work, which gives the public an opportunity to scrutinise…
BY DAVID WANJALA & ANTONY MUTUNGA There has been an increase in formal financial inclusion from 26.3% in 2006 to 82.9% in 2019 in Kenya as a result of the introduction of mobile money, according to the 2019 FinAccess report. With this expansion of mobile money, other innovations would come up to aid and compliment it. Among them were Safaricom’s Lipa na M-pesa’s PayBill and Buy goods services. The first to be introduced to the market was Pay Bill, which was one of the additional services to be incorporated in M-Pesa. This additional service was a customer-to-business payment system. Through…
BY DENNIS NDIRITU Kenyans were recently treated to shocking news in the local media of Chinese traders engaging in small-scale trade that has been the preserve of locals for a long time. The Chinese are said to have taken over the supply and retail of mitumba clothing and other small scale businesses in Gikomba market among other local markets. An interview with a section of the aggrieved traders at Gikomba market elicited the pain of a workforce agitated by the proliferation of Chinese business in Kenya at a great cost to the local traders. The traders say that the Chinese…
BY VICTOR ADAR Everyone reaches a point in their profession where the best thing to do is to branch out. It is seemingly not easy to see it coming but one Peter Ndiang’ui made the most out of a similar transition. Arguing that you don’t need to step back from an idea whose time has come, his was a big gamble. He started off as a tech and strategy consultant in Australia mainly focussed on media, financial services, telcoms and energy. At the tail end of his consulting career Mr Ndiang’ui got more involved in formulating growth strategies for organizations…
BY DAVID ONJILI The common denominator with most of the country’s state corporations is their inability to adapt to fast changing technological advances the world has experienced. This has left most of them obsolete as the world moved forward at a faster pace to keep up with technological innovations and the ever-changing needs of the citizens. That aside, a number of corporations have been victims of poor management as funds are misappropriated and the infrastructures that they stood on vandalized. All this has denied Kenyans the needed services and rendered many industrious citizens unemployed. Postal Corporation of Kenya (PCK), however,…
BY FUAD ABDIRAHMAN The annual remittance across the globe was $529 billion in 2018, an inspiring increase of around 9.6% from the year before which was $483 billion. This being from the officially recorded statistics, the figures could be even higher. One issue, however, remains a major concern; a huge chunk of the money remitted goes into fee charges. Globally the average cost of sending money stands at 7.1% of the amount sent, according to a report by the World Bank. It is higher, however, for African nations. The same report says the sub-Saharan countries are the most expensive to…
