Suba South MP Caroli Omondi has raised concerns that the government’s plan to borrow Ksh480 billion from the local market this year could limit access to credit for ordinary Kenyans and small businesses.
Speaking during an interview on Citizen TV on Monday, August 18, Omondi cautioned that heavy domestic borrowing risks crowding out commercial banks, reducing their incentive to lend to individuals and enterprises.
“The government is borrowing too much from the market. This year alone, it plans to borrow Ksh480 billion, which will mean that banks will not have the incentive to lend to the small people anymore,” Omondi warned.
He argued that while President William Ruto’s empowerment programs are well-intentioned, they cannot succeed without affordable and sustainable credit structures.
“The empowerment programs are not sustainable because if you want to help people get out of poverty, you must give them affordable credit, and that affordable credit must be something that goes in a cycle, if they borrow, they use, and repay back,” Omondi said.
His remarks come days after President Ruto unveiled plans to establish a Youth Enterprise Investment Bank with a Ksh9.75 billion capital base. The bank, expected before the end of the year, will provide financing, credit guarantees, and training programs to support young entrepreneurs.
Ruto explained that the institution would address barriers such as high interest rates, lack of collateral, and limited access to business development services, which continue to frustrate many youth-led enterprises.
While welcoming the initiative, Omondi stressed the need for broader reforms to ensure Kenyans are not priced out of the credit market due to government borrowing.
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