Kenya adopts bill capping bank interest rates
Interest rates will be capped at four per cent above the central bank benchmark rate.The Kenyan president has signed into law a bill capping bank interest rates at four per cent above the central bank benchmark rate.
Uhuru Kenyatta explained in a statement that the law will regulate applicable rates to bank loans and deposits thereby capping interests that banks can charge.
He said he acted to ease the frustrations linked to the cost of credit and the applicable interest rates on the "hard-earned" deposits of Kenyan people.
Reacting to the announcement in a statement seen by Daily Nation, the Kenya Bankers Association said that while banks are committed to bringing down loan interest rates, they "do not feel that an arbitrary rate cap is in the best interests of the majority of people and businesses that this law seeks to support."
It added: "The reality is that there is little evidence from other countries that such interventions have helped the majority of citizens, and in a number of countries such laws have been reversed to promote financial inclusion."