President Ruto: Capital markets should offer alternative funding for development

President William Ruto

President Dr William Ruto and the Chief Executive Officer of the Nairobi Securities Exchange (NSE) Geoffrey Odundo (right) at the Nairobi Securities Exchange grounds on Wednesday, March 22, 2023 during the bell ringing ceremony to officiate the listing of Laptrust Imara I-Reit.

Photo credit: Dennis Onsongo | Nation Media Group

Kenya’s capital markets have been challenged to create products that offer alternative funding for national development in the country, while at the same time making returns to investors.

President William Ruto led the call on Wednesday, noting that by devising mechanisms that leverage funds such as diaspora remittances, banks deposits, savings, and insurance plans, the markets have the potential to offer alternative funding for sustainable development that would not only bring economic growth but also assure investors of proper returns.

The President observed that Kenya’s debt and equity market has been effective in mobilizing domestic and international capital, withstanding waves of local and global shocks.

“It is imperative for our capital markets to devise appropriate mechanisms that leverage the savings component of all funds, including hustler fund, diaspora remittances, banks deposits, capital market circles, insurance plans, savings held in fintech assets, to provide a sustainable critical mass of capital to finance the transformation of our country,” President Ruto said.

The President observed that it was possible to come up with products affordable to borrowers while giving an attractive return to savers, enabling Kenyans at the bottom of the pyramid to become lenders and investors “who finance national development and economic growth.”

He spoke while presiding over the listing of the Laptrust Imara I-Reit at the Nairobi Securities Exchange (NSE), where he expressed confidence in the capacity of the capital markets to evolve and innovate towards availing requisite funding to support the growth of business as well as complement funding of national development priorities.

“I am persuaded that our capital markets can offer reliable alternative funding for all categories and sizes of businesses, which is also responsive to their long-term strategic intentions.

“Our capital markets’ capacity to evolve on a sustainable, continuing basis, is therefore a critical pillar of our competitiveness as an economy. It is also a fundamental factor of our ability to finance development, thereby creating jobs and alleviating poverty,” the President said.

The President further noted that collaboration among industry stakeholders in pursuit of innovative instruments that enhance the credibility, competitiveness, liquidity, and efficiency of the capital markets was commendable.