By Reagan Nyadimo
The
banking sector has not bounced back strongly from the great recession. Inasmuch as Kenya remains an example in
financial inclusion new regulations slapped on the industry following the
collapse of the 3 lenders continues to haunt financial Institutions. In fact,
as country we risk financial meltdown.
As we speak, the Kenya’s banking industry has stagnated in
the first 3 months of the year 2016. This slow down which has been supported by
decrease in gross loans, banking assets and stagnant customers’ savings signals
eroded confidence level in the sector. In
my opinion, this is due to the unprofessional handling of the Chase bank which
was closed due to run of deposit.
The effect of this ground shaking disruption in the Industry
which have contributed to flight of deposits to banks perceived as “stable”
have forced small lenders to halt lending.
This temporary action to avert liquidity crunch by the small lenders
have led to massive losses in interest income. With the look of things, this is not just
small lenders problem.We are
to see more of these in the coming days as the reality of the enforcement of
regulations begins to weigh down on the industry.
The sad reality is that as the industry glares into Q3 with
this nasty hangover, massive layoffs will be inevitable. This coupled with lack
of credit to finance development will definitely have negative effect on our
GDP.
There is a wide spread panic in the industry which if not
acted upon in good time, we will have ourselves to blame in the coming months.
The greed levels in Kenya is alarming. I personally don't expect much from this bandit economy.
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