How Kenyan banks are reorganising a year after rate capping

Close up of man's hand about to put a credit card into a cash machine.

NAIROBI, KENYA: On August 24, 2016, when the banking law was amended to deny banks a free hand in pricing loans, top on their worry was the thought about having to live without the goose that has been laying the golden eggs – the interest income from loans and advances.

Half-year results are already in and the impact of capping the interest rate is clear. Net interest income for most banks has dropped putting a break on the lenders’ growth trajectory that has for long been a normal trend.