An appropriate solution to address the high interest rates is needed, but without the collateral damage emanating from capping interest rates. Bank customers face remarkably high lending rates. This is confirmed by other countries that have abandoned interest rate caps, and Kenya’s own experience that led to eliminating interest rate controls in July 1991. Against this backdrop, the expectation is that caps on interest rates will provide the mwananchi with the much-needed relief by reducing the burden of high rates. However, CBK has also argued that capping interest rates will have overwhelmingly negative consequences on businesses and consumers.

Source: The Star August 02, 2016 23:03 UTC