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BY NAMULONGO PETER,NAIROBI,5TH NOV 2019-Kenyans seeking bank loan will face huge challenges after Members of Parliament (MPs) allowed banks to set interest rates on new loans as the interest rate caps fall.
In a Tuesday afternoon session in parliament used to take a vote on the same chaos were witnessed with the majority of MPs walking out on house sittings to leave a depleted minority, effectively failing to overturn the recommendations by President Uhuru Kenyatta on the repeal of the rate cap.
To retain the rate cap, the Presidential proposal required the opposition of a minimum 233 members but by voting time, only 161 MPs were present therefore the House could not even debate on the matter.
Consequently, the President’s memo recommending the scrapping on the interest cap law automatically sailed through.
Upon the signing of the Finance Bill by President Kenyatta, new interest rates charged on loans will be left to the discretion of banks.
However MPs have taken up the recommendations of the National Assembly Finance Committee to hold existing loans at the prevailing rate of four percent above the Central Bank Rate (CBR).This has comes as huge relief to current loan holders who will not be affected in the new changes.