Few hours after President Uhuru Kenyatta signed the bill capping interest rates into law, Kenya Bankers Association released a statement expressing their displeasure.
The law now compels all Kenyan banks to bring interest rates on loans down by 4 percent below that set by the Central Bank of Kenya.
In a statement released yesterday, the umbellar of the lenders expressed their unhappiness in the manner in which the bill was signed without putting into consideration the concerns that had been raised.
“We do not feel that an arbitrary rate cap is in the best interests of the majority of people and businesses that this law seeks to support,” read part of the statement.
The banks are of the opinion that the law will now impact negatively on the economy of the country should that drastic measure be taken at once.
“The reality is that there is little evidence from other countries that such interventions have helped the majority of citizens, and in a number of countries such laws have been reversed to promote financial inclusion,” they said in the statement.
Read: Capping of Interest Rates To Hurt Small Banks
Kenyan commercial banks have been of the spotlight with majority of Kenyans accusing them of arbitrary hiking the interest rates for their own benefits. At one point this year, the interest rates rose as high as 20 percent at the time when the Kenyan shilling was feeling the heat from the dollar.
“We as the banking industry remain committed to addressing the fundamental issues that drive up the cost of credit.” Said the statement.
Most economic analysts, however, are foreseeing doom in the economy as a result of the signing of the bill into law. They say that such drastic measures will have a negative impact to the banking sector in the country which is key to the economic development of any given country.