Mixed reactions over the interest rate cap
Experts are expressing mixed reactions over the interest rate cap ahead of the debate in parliament this afternoon to decide whether to uphold or repeal the interest rate cap in the finance bill 2019.
Today during a debate on interest rates capping and debt, organized by CFA society East Africa, Hon Jude Njomo, the proprietor of the interest rate capping bill reiterated his commitment towards ensuring that the interest rate cap stays put in order to protect Kenyans against exorbitant interest rates.
On the other hand, his counterpart Moses Kuria says the interest rate cap is not a long-term remedy. Instead, the banks should explore options of graduated interest rates based on risk analysis.
However, players in the Small, Micro and Medium Enterprises represented by Dennis Nthumbi seem to disagree as they term expensive interest rates as the greatest hurdle towards profitability and growth of the SME sector.
In the end, economist Kwame Owino says if the interest rate cap must work in favor of Kenyans, the government must reduce its domestic debt appetite. This will ensure banks lend to SME’s and Kenyans.