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Friday, May 29, 2020

This is the Reason why Kenyan Loans Are Still Expensive

    May 29, 2020   No comments

Cooperative Bank of Kenya
Cooperative Bank of Kenya Headquarters, Nairobi 

Loans in Kenya are very expensive. These are remarks by some individuals in the country who are finding the interest rate the commercial banks are charging to be high.

Before end of last year, there was a rate cap that forced regulated lenders charge interest rates at only 4 per cent above the Central Bank Rate (CBR) which is the base lending rate.

This way, banks could only charge 12 per cent per annum as the interest rate on loans when the CBR was at 8 per cent as set by the the Central Bank's Monetary Policy Committee (MPC).

Late last year, the rate cap was removed! The President Uhuru Kenyatta allowed the rate cap removal to be effective among other things when he signed Finance Bill 2019 into law.

Unfortunately many Kenyans do not know this happened are now wondering why loans are expensive. When CBK released May 27th MPC meeting report, some people were complaining about high loan interest rates;
CBK on Twitter


All you need to know now is that all regulated lenders can now price their loans at any interest rate as they wish and the law allows this.
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Mwabaya Katana

About Mwabaya Katana

Mwabaya Katana is a Finance Online Researcher and Writer.He is the founder of 'Loans Kenya' Blog.

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