The Industrial and Commercial Development Corporation (ICDC) has said its reduced low interest loans will help young businesses and entrepreneurs to improve and grow their businesses.
The government owned corporation has reduced its rates to 13 per cent which is a percentage lower than those charged by commercial banks and a percentage higher that those charged by saccos.
“Our rates and terms of lending have been modest in the industry. The average bank lending rates have been 18.3 per cent before the commencement of the new law while ICDC has been lending at an average of 16 per cent,” said ICDC acting executive director Kennedy Wanderi
He said ICDC was happy with the by Government’s move to control the interest on loans charged by commercial banks which was why the corporation had reduced its lending rates.
Wanderi said with the lower rates, more business people will borrow money and that will stimulate the growth of the economy. The rate capping law sets the maximum lending rate at four percentage points above the Central Bank Rate (CBR). The law also sets the minimum returns payable by banks on customer deposits at 70 per cent of the CBR.
Commercial banks have set their interest 14 per cent, four percentage point above the CBR, currently set at 10 per cent.
ICDC is best known for promoting economic development through equity participation