This archive report was first published on 14 May 2020.
On May 14, 2020, President Uhuru Kenyatta announced a stimulus package to combat the economic impact of the COVID-19 pandemic.
As part of the package, the National Treasury offered a 100 percent tax relief for individuals with a gross monthly income of up to Sh24,000.
The President also directed the Central Bank of Kenya to lower the Central Bank Rate (CBR) by one percentage point to 7.25 percent and to lower the Cash Reserve Ratio (CRR) by one percentage point to 4.25 percent.
However, banks have been accused of abusing the stimulus funds by not passing on the benefits to their customers.
According to Bitange Ndemo, a columnist, the banks have instead increased their margins by 2.75 percent, making it difficult for customers to access loans at lower interest rates.
Ndemo argues that the banks' actions are contrary to the President's intention of stimulating the economy and are instead widening the income disparities in the country.
He cites a report by Oxfam International, which states that less than 0.1 percent of the population owns more wealth than the bottom 99.9 percent.
Ndemo concludes that the banks' actions are akin to killing the 'goose that lays the eggs' and that they should be transparent about the terms of rescheduling debt for consumers.
