Postbank Likely to Extend Loan to Rural

By Godfrey Tung'wet Posted 06 July 2006 @ 11:59 am EET     Print     Reprint     E-Mail     Comments

NAIROBI (IBTimes.com) - Postbank may soon start giving loans to low-income people and small banks in the rural areas.

Parliament passed a motion seeking to amend the current law governing its operations to give credit to people shunned by the large commercial banks.

The bank currently operates as a non-development finance institution, and is fully government-owned. It was established under the Kenya Post Office Savings Bank Act 1978 when the East African Community broke up in 1977.

It was observed that commercial banks had been unable to expand their operations to smaller towns and accused of exploittion.

The Mps said the country could not hope to develop without making credit cheap enough for the jua kali (informal sector) and accessibility to affordable loans as sure way to reduce poverty.