Kenya Approves Bill to Cap Interest Rates

Date Published 8/10/2016
Author Marja Hoek-Smit
Theme Housing Finance Policy
Country Kenya

Last week Kenya’s parliament approved a bill to cap interest rates to 4 percent above the Central Bank of Kenya’s benchmark rate, currently at 10.5 percent. The Central Bank of Kenya as well as the Kenya Banker’s Association oppose the bill and have urged President Uhuru Kenyatta to send the bill back to parliament and allow the sector to operate on market principles. In a move to stave of the ratification of the bill the Kenya Banker’s Association, which represents 45 banks, announced that its members would set aside $294 million to decrease lending rates to small and medium enterprises (SME) by 100 bp starting immediately. 

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