Kenya Reintroduces Interest Rate Caps Abandoned in 1991
- Government fails to publish more detail on the limits
- Most lenders have already said they’ll cap rates at 14.5%
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Kenya’s government published an amendment to its banking law regulating how much lenders can charge for loans, yet failed to give more details on how the legislation that comes into effect on Sept. 14 will be implemented.
President Uhuru Kenyatta approved the law last month, reintroducing interest-rate limits that were done away with in July 1991. The amended Banking Act requires lenders to peg credit costs at 400 basis points above a benchmark central bank rate and also compels financial institutions to pay interest of a minimum of 70 percent of the same rate on deposits.