Diamond Trust Bank (DTB) has projected an increase in lending to individuals and small businesses as Kenya’s economy continues to recover from last year’s challenges. The bank believes that with steady growth and economic stability, access to credit will improve significantly.
Speaking at the DTB Economic and Sustainability Forum in Nairobi, DTB Kenya Chief Executive Officer Murali Natarajan expressed confidence in the economy’s resilience. He noted that the banking sector’s credit could double over the next decade from the current $32 billion if the current momentum is maintained.
According to Mr. Natarajan, the immediate beneficiaries of this positive trend will be individuals and micro, small, and medium enterprises (MSMEs). He emphasized that despite the sector being a mix of formal and informal businesses, banks are now prioritizing retail and SMEs, presenting a significant opportunity for growth.
“With our team, the guidance of the board, and the Group CEO, we are confident that by focusing on key segments such as agriculture, retail, and MSMEs, and making lending more accessible, we should be able to double our balance sheet within three to four years,” he stated.
To achieve this ambitious goal, DTB plans to enhance its digital offerings, expand partnerships, and increase the number of branches. Mr. Natarajan believes these strategies will enable the bank to reach more customers and provide better financial services.
He attributed his optimism to Kenya’s stable economic outlook, bolstered by lower interest rates, favorable weather conditions, and reduced fuel prices. He also commended the government and the Central Bank of Kenya for navigating last year’s economic turbulence.
“The macroeconomic environment looks stable, interest rates are falling, and remittances from Kenyans abroad remain strong,” he said.
DTB projects Kenya’s economy to grow by five percent this year, though challenges and risks remain. The National Treasury’s Principal Secretary, Dr. Chris Kiptoo, echoed similar sentiments, stating that Kenya has a resilient and diversified economy that can withstand both external and domestic shocks.
“When I started, it was very hard, and I had many sleepless nights. Now the worst is over, but the future is brighter. We have a resilient economy, diversified, and that’s how we come out of shocks,” said Dr Kiptoo.
Dr Kiptoo said the focus for the Budget in the next financial year would be on agriculture, exports of tea, edible oil, cotton, leather, dairy, natural resources, building materials, and the blue economy.
To boost lending to the private sector, said Dr Kiptoo, the Credit Guarantee Scheme would be transferred to a government-owned company to keep it going. The Credit Guarantee is currently an arrangement between the government and seven banks where the Government commits to pay a portion of the outstanding amount in the case of a default .
He noted that the committee verifying pending bills has so far approved the payout of KSh236 billion of the more than KSh600 billion when the Kenya Kwanza administration took over. Of this, he said, the bulk would go to small businesses that are suppliers and to road contractors.
The Principal Secretary said Kenya would continue to be in the International Monetary Fund programme to maintain stability.
