Finance Minister Njeru Githae has called on commercial banks to lower their lending rates to reflect the dipping Central Bank Rate (CBR) benchmark.
Githae said on Tuesday that banks should cut their rates to as low as 13 percent in line with the recent decision by Central Bank's Monetary Policy Committee to lower the CBR to 11 percent.
"There are very few businesses which can afford interest rates of 35 percent. In fact, none. Recently CBR reduced to 11 percent so we expect the banks to follow suit and to be around 12 percent or 13 percent maximum. That is the rate we are looking for," said Githae.
Speaking during the laying of the foundation stone for the expansion of Keroche Breweries in Naivasha, Githae said the key macroeconomic fundamentals were stable especially the drop in inflation to four percent hence the need for the banks to react downwards.
The minister said the government was looking for ways to encourage the growth of the private sector so as to increase the amount of revenue in form of taxes.
"My revenue target for the next financial year is Sh1 trillion in taxes and people are wondering where these taxes are going to come from. They are going to come from the private sector and not the government. And that is why we need to give all kind of incentives to the sector," emphasised the minister.
Presiding over the event, Prime Minister Raila Odinga called on the need to promote homegrown entrepreneurs to accelerate economic growth.
He said the developed world attained their status after encouraging indigenous investors to spur economic growth and insisted that Kenya must take the same direction to realise her Vision 2030 dream.
The premier challenged policy makers to work out modalities of enabling local entrepreneurs have easy access to credit facilities to facilitate growth in the sector.
"Local entrepreneurs only require skills and loans to succeed because they have a competitive edge over foreign investors due to their better comprehension of the domestic market," he said.
Keroche Breweries Chief Executive Officer Tabitha Karanja said when the expansion of the plant will be concluded next year, the brewery will double the workforce and have a capacity to produce at least 600,000 bottles on a daily basis.