Of Kenya's banks and rates

In what looked like a calculated act of tokenism, banks on Wednesday set aside Sh30 billion to lend to small and medium-sized enterprises at friendly rates and announced a 1 per cent reduction on interest rates.

This, the banks imagine, will assuage public anger over what many feel are exorbitant interest rates charged on loans. Two weeks ago, Parliament kicked up a storm after it passed a bill that if the President were to sign into law, could lead to the fixing of interest rates.

This newspaper has argued against controlling interest rates because of the knock-on effects it portends for the country's liberalised economy. But that is not to deny that consumers get a raw deal from the banks who rake in billions in profits every year and that any measure that brings down the cost of loans is most welcome. Small concessions like abolishing account-closing charges (How many people close accounts in a year?) would show banks in a better image. As it is, they come across as modern-day buccaneers who need a nudge to do good.