This archive report was first published on 9 November 2019.
On November 8, 2019, Sidian Bank, formerly K-Rep Bank, became the first lender to adjust its loan rates upwards following the repeal of the rate cap law.
The law, which was scrapped on November 8, 2019, opened the door for commercial banks to freely set the price of their loan facilities.
According to an internal memo signed by Chief Executive Chege Thumbi, the lender announced new loan rates effective immediately for new loans. The rates are as follows: corporates loans at 16 per cent, SME loans at 17 per cent, consumer loans at 19 per cent, microloans/unsecured loans at 19 per cent, credit cards at 19 per cent, and mobile loans at 19 per cent.
Existing loan rates will be communicated later, the memo stated.
“Following the signing of the Finance Bill into law by the President, which among other provisions repeals Section 33B of the Banking Act that provides for the capping of bank interest rates, the bank has reviewed interest rates for various products based on the associated credit risk,” said Thumbi.
Related articles include Parliament Adopts Proposal to Remove Rate Cap Law and Banks calm jitters over removal of rate caps.
