In a strategic move to foster business growth and reduce unemployment, the Kenyan government, through the Central Bank of Kenya (CBK), has implemented a reduction in interest rates.
From 11.25% in 2024, the rates have been lowered by 75 basis points to 10.75% in 2025, with an additional 50 basis point cut anticipated.
This move is expected to ease the financial burden on borrowers, thus creating a more favorable environment for business expansion and entrepreneurship, particularly among the youth.
Financial expert and CEO of I&M Bank, Gul Khan, has commended the government’s initiative, noting that the reduction in interest rates within the banking sector will enhance productivity at the grassroots level, contributing to the overall growth of the Kenyan economy.
“This is a crucial step in boosting the economy, especially by supporting small businesses and entrepreneurs,” he stated.
Eng. Lee Mutai, an expert in financial and asset management, also echoed similar sentiments, emphasizing that the interest rate reduction is aimed at empowering young professionals and entrepreneurs.
He pointed out that research has shown that young people who have recently completed their education, particularly those aged 1-4 years out of school, could greatly benefit from the lower interest rates and develop a savings culture.
“If they embrace these opportunities, they can significantly contribute to Kenya’s economic progress,” Eng. Mutai added.
This announcement was made during the opening of a new I&M Bank facility in the Makutano area of Meru County, which further underscores the bank’s commitment to expanding its reach and supporting local entrepreneurs.
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The new facility is expected to provide enhanced banking services, enabling residents and businesses in the region to access more affordable financial services, which will contribute to the growth of the local economy.
With these measures in place, the government hopes to attract more young people into business, foster savings habits, and ultimately reduce the country’s unemployment rate.
By John Majau.
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