Wednesday October 30, 2019 – The National Assembly’s Finance Committee has agreed with a proposal from President Uhuru Kenyatta to repeal a cap in commercial lending rates in line with Treasury’s request.
Two weeks ago, President Uhuru Kenyatta demanded that lawmakers remove a cap on commercial lending rates saying this is hurting the economy especially middle level traders.
In a memo he sent to Parliament, Uhuru said Kenya’s economy is fueled by small scale businesses that were denied loans due to a cap on interest on loans.
Uhuru also said in order to jumpstart the poorly performing economy, banks should be allowed to regulate interests so than many businessmen and women can be able to access loans at any time.
The committee chaired by Kipkelion MP, Joseph Limo, said it has agreed with the President's proposal and it will rally MPs to remove the cap on interest.
“The committee, having considered the President’s reservations on the Finance Bill 2019, recommends that the House adopts the proposals by the committee to adopt the President’s reservations with amendments," the committee said in its report.
“Notwithstanding the repeal of Section 33b, any agreement or arrangement to borrow or lend, which was entered into, pursuant to the provisions of section 33b, shall continue to be in force on such terms, including interest rates, and for the duration specified in the agreement or arrangement.”
The committee also reasoned that banks, hungry for profits, would quickly apply new interest rates the moment the President assents to the Bill, throwing borrowers off balance and affecting their investments.
The Kenyan DAILY POST