Kenya should prepare for crisis and economic slowdown after capping interest rates

In Kenya, like in most other countries, the public has always resented banks for raking in hugely obscene profits. Those pushing the lending cap laws which President Uhuru Kenyatta has now signed into law, knew this and ultimately took full advantage of it.

In fact, the president referred to the high return on equity Kenyan banks enjoy when compared with other sectors of the economy. What many don’t realise, however, is that not all bank profits end up in shareholders pockets at the end of the day. And that these banks in fact, need to make adequate profits if the system is to remain financially stable and to lend to the real economy.