Kenyans React to Signing of Interest Rates Bill into Law

On Wednesday, President Uhuru Kenyatta signed into the banking interest rates Bill into law setting in motion another wave of debate.

President Uhuru Kenyatta chose to go against the CBK and the Kenya Banker’s Association recommendation both of which institutions were against the Bill.

The Bill, which is now law makes it mandatory for bank interest rates to be four percent less than that set by the Central Bank of Kenya.

Banks thrive mainly on interest rates and economic analysts are saying that the banking sector is going to feel the heat.

Some are saying that the law now puts small banks at risk of closing down their businesses as their income has been capped.

Kenyans across the country received the news with mixed reactions. Majority if them were excited but some feel the change is too drastic.

“I feel like today we had our own version of the Brexit. This is a landmark signing in the economy of this country,” said Mr. Henry Wangila, the head teacher of Kibingei Secondary School in Kimilili, Bungoma County.

“I think many Kenyans now will have access to loans and the banks have no otherwise but to pave the way for the law to take its course,” said Mzalendo Tomkim Barasa, from Alliance Boys High School.

“At least the banks will behave now. The interest rates that they were charging were just crazy. As borrowers, we were actually suffering in the hands of the hungry lenders,” said Mrs. Alice Matere, a business lady at Amalemba, Kakamega County.

Read: Banks Cry Over Signing of Interest Rates Bill into Law

“The President should have listened to the professionals in the sector. He should have returned the Bill to Parliament for some amendments. The CBK, being the main financial institution in the country, had reasons why it was against the Bill. But now that it has become law, what can we do?” Said Mr. Wanjohi Paul, a banker with one of the banks in the country.

Most Kenyans, however, are not aware what the Bill was all about, leave alone signing it into law. “I have just been hearing about it in the radios. I don’t know what it is all about,” said Mr. Joseph Tekei.

All eyes are now set on the Kenyan banks to see how they will implement the changes.