This archive report was first published on 5 November 2019.
On November 5, 2019, a crucial vote in the Kenyan Parliament took a chaotic turn, with the majority of Members of Parliament (MPs) walking out, leaving a depleted minority. This move effectively allowed the President's proposal to repeal the interest rate caps to sail through.
The President's memo recommending the scrapping of the interest cap law automatically passed due to the lack of a quorum. The interest rate caps, which had been in place to protect borrowers, were a key recommendation of the National Assembly Finance Committee.
However, in a relief to current loan holders, the MPs have taken up the recommendations of the National Assembly Finance Committee to hold existing loans at the prevailing rate of four percent above the Central Bank Rate (CBR).
With the signing of the Finance Bill by President Uhuru Kenyatta, new interest rates charged on loans will be left to the discretion of banks. This move has left Kenyans at the mercy of banks, as they will no longer be protected by the interest rate caps.
