Kenya will establish an agreement with International Monetary Authority (IMF) to renew its $1.5 billion standby credit facility. The agreement will stimulate Kenya’s overall growth and ease funding access for the rural economy.
Last week, the IMF team visited Kenya to further discuss its economic development and reform plans, the local media reported. The IMF team met the Acting CS Treasury Ukur Yatani, CBK governor Patrick Njoroge, head of the public service Joseph Kinyua and Treasury PS Julius Muia, The Star reported.
According to the IMF team, the country’s economic growth and fiscal plan is strong. Next year another round of discussions will take place on a new precautionary standby arrangement.
The IMF team was led by Benedict Clements, who said that the country’s current account deficit has reduced and foreign exchange reserves are sufficient.
Kenya’s economy has demonstrated robust growth in recent years. In the first half of 2019, its GDP growth averaged 5.6 percent despite external factors that affects agriculture production. That said, the country’s growth is expected to increase in the second half of 2019.
The IMP team told The Star that, “Although credit growth has remained low (6.6 percent year-on-year in October) it is expected to rise steadily because of the recent elimination of interest rate controls and deployment of innovative credit products targeting small enterprises.”
Also, the Kenyan government in partnership with five commercial banks has introduced a mobile loan app called Stawi. The app offers unsecured financing to SMEs in the country. It is managed by Commercial Bank of Africa, Cooperative Bank of Kenya, Diamond Trust Bank Kenya, KCB Bank and NIC Bank.