ICDC lowers interest rates to 3pc of CBR

ICDC lowers interest rates to 3pc of CBR

The Industrial and Commercial Development Corporation (ICDC) has slashed interest rates on loans to 13 percent in bid to be more competitive.

The reduction on interest rates is expected to makes ICDC more compelling to entrepreneurs seeking financial support as it is currently below what is charged by commercial banks.

An amendment to the Banking Act capped interest rates at four percent of the central bank rate (CBR), with banks currently charging 14 percent for loan facilities.

According to ICDC it shall maintain all interest on loans at three percent of the CBR.

The change in pricing was effective from November 1

ICDC acting Executive Director Kennedy Wanderi said the board had resolved to review the cost of loans after President Uhuru Kenyatta assented to law, the banking amendment Act 2015 that caps lending rates at a maximum of four percentage points above the CBR which is currently at 10 percent.

“The corporation welcomes the government’s resolve to reduce the cost of borrowing as it is set to increase the level of investments. With the decrease in the cost of borrowing, the uptake of loans across the economy is expected to go up thereby stimulating economic growth,” Mr Wanderi said.

ICDC is a state owned development finance and investment company with investments in a wide array of sectors.

The corporation has a stake in Centum Investments, AON Minet, KENTACO as well as Uchumi.

Besides investing the firm processes business loans to qualifying companies without assuming equity positions in the borrowing entities.

ICDC recently gave a Sh110 million loan to Global Supply Solutions, a Thika based renewable energy company.

Mr Wanderi said the move is meant to small and medium sized companies at various stages of their business cycle to spur growth by leveraging on the medium and long term loans offered by ICDC.

“ICDC is committed to investing in projects with the potential to create tomorrow’s indigenous blue chip companies,” he said.