Why Government could scrap interest rate capping law
Details have emerged indicating the government could revisit the interest rate capping over...
This is after Finance Cabinet Secretary Henry Rotich expressed concern over the continued decline of credit access to the private sector.The CS also noted that it had become difficult for individuals to access loans from banks.However, Rotich stated that it was still too early to intervene on the issue and attributed other factors that could have contributed to the adverse impact of the economy. “Two banks were placed under receivership which put some strain on the financial sector. There is also a general phenomenal because we have also seen some decline in other neighbouring countries which do not have caps. When we put this together, caps could not be the only thing that has slowed down the private sector credit,” Rotich was quoted by Capital FM.Rotich's sentiments come barely a week after President Uhuru Kenyatta shared similar concerns during his State of the Nation address."It is unfortunate that the unintended consequence of the interest rates was a slow-down in lending by our commercial banks. This is an issue that concerns us...I will actively seek to resolve... so that credit can start to flow again to the real drivers of our economy,” the Head of State announced.Banks have been urging the government to scrap the law especially after they recorded a dip in profits since the bill was signed into a law.
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