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World Bank arm to insure Kenyan road contractors

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Miga has been involved in about eight projects in Kenya, mostly in energy sector
Miga has been involved in about eight projects in Kenya, mostly in energy sector. FILE PHOTO | NMG 

Multilateral Investment Guarantee Agency (Miga), the World Bank’s insurance arm, is looking to guarantee companies that are angling for the Sh55 billion contract to build the Nairobi-Nakuru Highway, top officials said.

Miga vice-president and chief operating officer Vijay Iyer said the agency hopes to ride on the project to diversify away from current concentration in energy sector and to break the three-year drought that has characterised its work with the private sector in Kenya.

“We are looking at Nairobi-Nakuru Highway that National Treasury has put up for bidders. I understand they will be announcing the successful bidder very soon,” said Mr Iyer.

The insurance facility is to shield the winning contractors from non-commercial risks and improve their access to funding for the project.

“That is one project that is big and very transformational at it will strengthen Kenya’s logistical backbone. We are hoping that we will have a role to play in its success,” Mr Iyer said.

In November 2016, the National Treasury published the project memorandum for the 273 kilometre Nairobi-Nakuru-Mau Summit segment of the highway as it invited private inves Summit segment of the highway as it invited private investors to bid for funding of the project that is to be built through public-private partnership (PPP).

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The Nairobi and Mau Summit section of the highway is part of the Northern Corridor road that connects the Port of Mombasa via Nairobi to the border with Uganda at Malaba and onwards to Kampala.

The Treasury has estimated that the average number of vehicles plying the Nairobi-Mau Summit segment of the corridor per day is 16,000, and that the traffic peaks in Nakuru where traffic could rise up to 40,000 vehicles.

“The road is listed among the most dangerous in the world having killed 575 people between 2012 and 2014,” the Treasury said.

Miga wants to offer guarantees to financial services firms that will be supporting private investors in the project.

“The risk of breach of contract is very relevant in Kenya because of increased attention to PPP projects,” Mr Iyer said.

The World Bank uses Miga to insure risks such as expropriation, business interruption due to civil or political disturbance as well as breach of contract with investors operating outside their home countries.

Last week, Mr Iyer was in Nairobi where he met ministry of transport, housing, and energy officials, as well as representatives of banks and renewable energy companies.

He said Miga has been getting inquiries from a number of its clients who are keen to invest in Kenya and hopes that some partnerships will be realised “soon”.

Miga has been involved in about eight projects in Kenya, mostly in energy sector.

“We see a lot of opportunities here in supporting government in some PPP projects by bringing in quality private investors and finding ways in which the projects can be structured to ensure resources that are coming in are well prices and carry a much longer tenure,” he said.

Out of Miga’s total portfolio exposure of $22 billion (Sh2.2 trillion) globally, Africa accounts for about $5 billion (Sh500 billion) or 23 per cent.

Mr Iyer wants to grow that to 33 per cent in the next three years.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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