This archive report was first published on 18 October 2019.
On October 18, 2019, President Kenyatta declined to assent to the Finance Bill 2019, citing concerns over the interest rate cap imposed in 2016.
According to National Assembly Majority Leader Aden Duale, the President has returned the Bill to Parliament for review, specifically to repeal the interest capping law.
Kenya's Treasury and Central Bank of Kenya (CBK) have also been pushing for the repeal, arguing that the law has negatively affected private-sector loan growth and discouraged lenders from giving loans to SMEs.
International Monetary Fund (IMF) agencies have also been pressuring the government to scrap or modify the interest restriction law.
Before the introduction of the capping law in 2016, banks were charging high lending rates of up to 25 percent.
With the cap in place, lending rates were capped at four percentage points above the Central Bank of Kenya's benchmark, currently at nine percent, resulting in a maximum borrowing rate of 13 percent.
