Why Kenyans may still be exposed to high interest rates

Central Bank of Kenya (CBK) governor Patrick Njoroge. Even if the President were to sign the proposed Bill into law, microfinance institutions and mobile phone loan transactions will not be affected by the decision by the National Assembly to cap interest rates at no more than four per cent of the Central Bank rate. (PHOTO: COURTESY)

An amendment to the Banking Act that introduces the capping of interest rates will still leave any Kenyans exposed to exploitative rates by financial institutions, it has now emerged.

Even if the President were to sign the proposed Bill into law, microfinance institutions and mobile phone loan transactions will not be affected by the decision by the National Assembly to cap interest rates at no more than four per cent of the Central Bank rate. The Banking Act (Amendment) Bill does not cover microfinance institutions or any other entity which is not licensed under the Banking Act.