Treasury blocks Luhya Nation from forming their own Bank

Photo:CS Henry Rotich during the past function/Photo Courtesy

The Western Region has again suffered another major set back in its efforts to calibrate the region into a self-dependent economic hotbed.

The Luhya Nation under the leadership of Governor Wycliffe Oparanya was championing for the formation of the regional bank in the region.

After putting in enough efforts and investing in the idea, The Treasury has squashed the idea.

Photo; Governor Wycliffe Oparanya /Photo Courtesy

CS Henry Rotich has poured cold water to the idea stating that it is not viable.

Appearing before the National Assembly Committee on Finance and National Planning, Mr Rotich said the counties, under the Lake Region Economic Bloc, do not have the financial clout to sustain a bank.

“If the national government has been struggling to manage its banks, it will be difficult to have a county do it. We have been telling them that this agitation of saying we want a regional bank is not viable,” said Mr Rotich. “The 43 banks we have in the country have branches in every region. So for counties to insist that they’d set up one to cover a particular region does not make any sense because there is no gap and there is no rationale for a bank for a particular region.”

Photo:National Treasury/Courtesy

The existing banks, he said, are sustained by collecting substantial deposits in major urban areas like Nairobi and are then able to mobilise smaller regions where deposits are low. But confining a bank to one region that may not have sufficient deposits will not make any economic sense, he warned.

“It’s already becoming difficult to run a bank with presence in the entire country where only 10 banks run 70 per cent of the assets, while about 30 banks control the little remainder. So you can imagine how a regional bank will survive,” the CS said.

The region has been pushing for the establishment of this bank for over a decade but it has not germinated.

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