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AIROBI, May 14 (BERNAMA-NNN-KBC) -- Bankers here have renewed calls to
the Kenyan government to remove the limit it has set on interest rates,
noting that rationing of credit to the private sector is likely to
undermine delivery of projects under the government's agenda.
Kenya Bankers Association chief executive officer Habil Olaka said over the weekend that the cap on interest rates had crowded out small borrowers and in effect distorted the credit market, further stifling credit access by the private sector.
Bankers, who have all along been opposed to the Banking (Amendment) Act of 2016 which introduced caps on interest rates, now say the success of the ambitious government agenda of food security, universal health care, infrastructure and housing is strongly hinged to the banking law.
Bankers claim the law, which was expected to spur growth and ensure Kenyans have access to cheap credit, had instead ended up crowding out small borrowers such as small and mediusm-size enterprises (SMEs).
The government had amended the Banking Act after the move by the central bank to lower its benchmark interest rate was not matched by corresponding reductions in the lending rates of commercial banks.....
Kenya Bankers Association chief executive officer Habil Olaka said over the weekend that the cap on interest rates had crowded out small borrowers and in effect distorted the credit market, further stifling credit access by the private sector.
Bankers, who have all along been opposed to the Banking (Amendment) Act of 2016 which introduced caps on interest rates, now say the success of the ambitious government agenda of food security, universal health care, infrastructure and housing is strongly hinged to the banking law.
Bankers claim the law, which was expected to spur growth and ensure Kenyans have access to cheap credit, had instead ended up crowding out small borrowers such as small and mediusm-size enterprises (SMEs).
The government had amended the Banking Act after the move by the central bank to lower its benchmark interest rate was not matched by corresponding reductions in the lending rates of commercial banks.....
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