By Noel Wandera
Kenya’s capital market faces a conflict of interest because the Capital Market Authorities (CMA) regulations have restricted only five banks to act as registered trustees.
Cytonn Investments chief executive Edwin Dande said banks were themselves competitors in the money markets through Fixed Deposit products issued and money market funds managed by fund managers affiliated to the bank.
Unfortunately businesses rely on banks for more than 95 per cent of their funding, with capital markets providing less than five per cent, according to World Bank Data.
“It is clear that something is terribly wrong with our capital markets and we need to have the courage to examine the distortion,” said Dande, adding that capital markets are essential to financing businesses and that well-funded businesses lead to a growing economy, increased employment, and ultimately higher standards of life.