This archive report was first published on 16 November 2019.
On November 15, 2019, Central Bank of Kenya (CBK) Governor Patrick Njoroge cautioned banks against exploiting borrowers in the aftermath of the interest rate caps repeal.
Speaking at the third Kenya Bankers Association (KBA) Catalyst Awards, Governor Njoroge emphasized the importance of a symbiotic relationship between the banking sector's growth and customer satisfaction.
"We must satisfactorily respond to the questions at the top of every Kenyan mind and ask ourselves on what will be different this time. We must not fail Kenyans as it is the banking sector owes its existence," he said.
The remarks came as banking executives were split on transitioning back into the free credit market regime following the repeal of interest rate caps.
However, Governor Njoroge asked banks to take the lead in setting up a sound and sustainable financing model, avoiding the interest debate until the November 26 post Monetary Policy Committee (MPC) briefing.
"With great power comes great responsibility. This is the time to risk it all. If we don’t risk all to recover what we’ve put out there then we’re stuck," he added.
President Uhuru Kenyatta had earlier backed commercial banks to employ their best behavior in dealing with clients, highlighting co-authored interventions to address transparency between his government and commercial banks.
"The Government and the banking sector have initiated programs and measures to deal with the concerns of affordability and availability of credit from banks and at the same time strengthen the vulnerable sectors especially the MSMEs, women and youth," noted part of Presidential memo read out to MPs on October 17.
The CBK introduced the Kenya Banking Sector Charter in February this year to address transparency in the banking industry.
Moody’s, a global credit rating agency, has termed the lifting of lending rates as a credit positive, predicting an increase in loans and advances to secluded economic segments.
