This archive report was first published on 3 November 2019.
President Uhuru Kenyatta's push to repeal the Financial Bill 2019 has raised concerns among lawmakers, with Nandi Senator Samson Cherargei warning that scrapping interest rate caps will make loans costly and inaccessible for small income earners.
Speaking during an event, Senator Cherargei urged President Kenyatta to reconsider his position on the Finance Bill 2019, citing the potential harm it could cause to the economy.
"People like teachers will face it rough if the removal will be effected because the loans will be so expensive for them as teachers, and I, therefore, insist that loans should be capped as provided for," said Senator Cherargei.
The senator's concerns come days after Members of Parliament gave a nod to the repeal of the bill, which will pave the way for the removal of the rate caps.
President Kenyatta had earlier declined to sign the Finance bill 2019, asking the parliament to repeal the law by removing the capping on loans.
Senator Cherargei argued that the interest caps, which were passed in 2016, have had damaging effects to the economy, including lowering private sector credit and severing monetary policy transmission by the Central Bank of Kenya (CBK).
He also pointed out that the rate caps led to the mushrooming of shylocks and other unregulated lenders who took advantage of poor Kenyans.
