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The National Assembly on Tuesday repealed the 14% interest rate ceiling set for banks after the house failed to reach the quorum required to overturn recommendations made by President Uhuru Kenyatta.
There was drama at the House as MPs opted to walk out of the chambers, leaving the debate at a depleted minority, hence the President's demands were adopted.
President Kenyatta refused to sign the Finance Bill which proposed the capped interest rates and in turn wrote a memo requesting the MPs to scrap the set rate before he appends his signature to the Bill.
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President Uhuru Kenyatta during a past signing. 14% interest rate cap for banks flops as MPs fail to meet quorum during debate
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"The Committee of the whole house has adopted the Proposed Amendments to the Finance Bill 2019, as per the President's Memorandum seeking to reverse the Caps put on Interest Rates of Bank Loans," a statement from the National Assembly read on Tuesday afternoon.
What repealed cap on interest rates means for Kenyans
With the new decision by Parliament, Kenyan banks will be free to set any percentage of interest on loans they approve.
Banks had rallied against the set capped rates saying that they had reduced profitability since banks had opted not to lend to individuals deemed as high risk.
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Kenyan Parliament Building. 14% interest rate cap for banks flops as MPs fail to meet quorum during debate