Finance Committee urges tougher crackdown on predatory lenders amid Turkana outcry

The National Assembly's Finance and National Planning Committee has called for stronger enforcement of lending regulations to curb exploitative credit practices, as residents of Turkana County raised alarm over high-interest loans and proposed tax measures during consultations on the Business (Amendment) Act, 2024, while also urging the Central Bank of Kenya (CBK) to take firm action against predatory digital and microfinance lenders.

Speaking during a public participation forum at Turkana University on Friday, Committee Chairperson Kimani Kuria said existing laws already provide safeguards to protect borrowers from excessive lending charges and should be fully enforced.

He noted that it is an offence for lenders to charge interest that exceeds the principal amount borrowed, adding that stronger oversight by the CBK would help shield borrowers from exploitative practices that have become common among some digital lenders and microfinance institutions.

The concerns were raised by residents who complained that small business owners and traders continue to face exorbitant interest rates, making it difficult for them to repay loans and expand their enterprises.

 Residents welcomed plans to establish a Sovereign Wealth Fund but called for a framework that would enable counties to directly benefit from revenues generated through natural resources.

Many argued that Turkana County should receive a substantial share of the proceeds owing to its vast petroleum and mineral resources.

Pastoralist communities urged legislators to extend tax exemptions to animal feeds and veterinary drugs to cushion livestock farmers against rising production costs.

Concerns were also raised over the clarity of provisions relating to digital platform transactions. Responding to the issue, Kuria assured residents that the legislation would remain transparent and easy to understand.

"There is nothing that can be hidden in the law. I agree with you on the clarity of digital platform transactions. As a Committee, we will ensure that it is crystal clear," he said.

The Committee Chairperson also sought to clarify provisions contained in the proposed Kenya Revenue Authority (Amendment) Bill. He explained that, should the Bill be enacted, taxpayers with outstanding disputes with the Kenya Revenue Authority (KRA) would benefit from a tax amnesty programme.

The Committee’s three sub-committees are expected to conclude their nationwide public participation exercise on June 8 before embarking on report writing ahead of parliamentary consideration of the proposed legislation.