Bankers have pleaded with President Uhuru Kenyatta to reject the Bill seeking to cap interest rates, arguing that the move will hit small borrowers hardest.
If Mr Uhuru endorses the Bill, bank lending rates would be capped at 14.5 per cent based on the current CBR of 10.5 per cent which is substantially different from the current average lending rate of 18 per cent, as quoted from Central Bank of Kenya (CBK) data. Some borrowers are currently paying as high as 24 per cent for short- to medium-term loans.
Individuals, small and medium sized enterprises (SMEs) who are presumed to have a higher risk of defaulting will be locked out from accessing credit if the Bill becomes law, the Kenya Bankers Association (KBA) said Thursday.
Parliament Wednesday passed a Bill capping bank interest rates at four per cent above the indicative Central Bank Rate (CBR), now the matter is in President Uhuru’s hands.