The sports category has moved to a new website.
ADVERTISEMENT

Why Kenyan banks want rate cap law scrapped

Kenyan banks now want the government to scrap interest rate controls on grounds that it has reduced

___6413143___https:______static.pulse.com.gh___webservice___escenic___binary___6413143___2017___3___23___7___CBK

According to the Kenya Bankers Association (KBA), the new law had made it difficult for banks to lend even though it had not affected the saving and borrowing patterns.

“The solution is not to tweak the law, but to remove it and consider some proposals to make credit accessible. We know these problems and we are trying to address them,” KBA Chief Executive Habil Olaka said on Wednesday.

The lenders conducted a survey between January and February to prove their allegations stating that people had a difficult time to access loans.

ADVERTISEMENT

“There is mounting evidence the interest rate cap introduced in September 2016 dampened growth in quarter four and at the start of this year,” a member of the association added.

President Uhuru Kenyatta introduced caps on lending rates in August in a bid to fulfil a campaign pledge he made before coming to power in 2013 that he would lower the cost of loans.

In January 2017, the International Monetary Fund (IMF) asked the Treasury to remove bank interest rate caps stating that it posed a risk to financial stability in the country.

“The macroeconomic outlook is overall positive, including robust growth and reduced external imbalances. However, interest rate controls are likely to reduce access to credit, weighing on growth,” the IMF said in a statement.

The banks have been urging the government to make changes to the law since its implementation in 2016.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Why you shouldn't wash your face immediately after exposure to teargas

Why you shouldn't wash your face immediately after exposure to teargas

Why Mudavadi  has agreed to fold ANC party and merge with Ruto's UDA

Why Mudavadi has agreed to fold ANC party and merge with Ruto's UDA

Chief inspector who lost both arms during protest gets Sh1 million donation

Chief inspector who lost both arms during protest gets Sh1 million donation

Data Commissioner issues protocol for politicians after data breach

Data Commissioner issues protocol for politicians after data breach

Legislator Magdalene Kamene Kalembe dies in Nairobi

Legislator Magdalene Kamene Kalembe dies in Nairobi

AI & tech tools birth new era of activism by gen z and millennials in Kenya

AI & tech tools birth new era of activism by gen z and millennials in Kenya

DP Gachagua faces serious allegations of constitutional violations

DP Gachagua faces serious allegations of constitutional violations

Update on officer who lost both arms in Tuesday protests after teargas explosion

Update on officer who lost both arms in Tuesday protests after teargas explosion

Blog: Police officer loses fingers after teargas exploded on his hand [Video]
Live

Blog: Police officer loses fingers after teargas exploded on his hand [Video]

ADVERTISEMENT