East African Bankers Association plans interest rate reductions
The East African Bankers Association wants to introduce new measures to allow the region's banks to lower interest rates, free from legislation.The East African Bankers Association wants to introduce new measures to allow the region's banks to lower interest rates, free from legislation.
Speaking to Capital FM News, Chairperson Habil Olaka explained the high charges currently discourage many of those in the area from taking out a loan.
However, the proposed changes could increase competition within the sector, thus encouraging financial institutions to reduce their charges.
"The consumer needs to be given a choice," Mr Olaka stated, explaining the situation is one that affects all East African nations.
He added there are many people who are "completely unbanked and we need to extend our services to that consumer".
According to the expert, the changes will not cause people to turn to small financial sectors instead of larger banks, as they offer different services.
In April, Kenya's Acting Finance Minister, Robinson Githae warned banks to cut their interest rates or parliament will introduce mandatory caps, the Star reported.