National Treasury Cabinet Secretary has said that the interest capping rate is unsustainable and that it is causing the economy more harm than helping.
The cap on commercial lending has been into existence since September 2016 that set the rate at 4 percent above the CBK’s benchmark that stands at 10 percent that was aimed at limiting the cost of borrowing from banks.
The law was meant to help the consumer have access to loans from banks at affordable rates but this lead to banks shunning away from issuing loans to individuals and SMEs.
“This is not sustainable,” said the CS. “It can entail an abolishment or a modification, or complete amendment to allow flexibility.”