In September 2016, Kenya passed the Banking Amendment Act, creating interest rate controls where there were none before. It sets the maximum lending rate at no more than 4% above the Central Bank base rate; and the minimum interest rate granted on a deposit held in interest earning accounts with commercial banks to at least 70% of the same rate.
There has been an ongoing debate in the two years since on whether we should remove these controls because of their perverse effect on our economy. Today, we're joined by Elizabeth Wangechi, the Head of Research at Genghis Capital, to discuss the impact of these controls. Press play!
Resources
The Banking (Amendment) Act 2016
The Impact of Interest Rate Capping on the Kenyan Economy - Full
The Impact of Interest Rate Capping on the Kenyan Economy - Summary
CBK regrets interest rates cap due to negative effects on economy
MPs uphold rate cap law, scrap interest on savings