Jude Jomo, the legislator behind the law on interest rate cap, says that he will ensure the regulation stays in place
The lawmaker, who first introduced the bill in 2016, said that he and other legislators will use the 12 months given by the court to rectify the Banking law to ensure the limit on interest rate charges is not removed.
Mr. Jude Jomo also talked about introducing regulations to the digital lending sector where they charge high interest rates to individuals and small time traders.
The banking law came into effect in September 2016 and was intended to provide affordable credit to Kenyans who previously had to pay exorbitant interest fees to commercial banks. However, it led to a decline in the amount of loans available to individuals and private businesses by banks.
Last week, three high court judges ruled that section 33b of the banking act, which limits the rate of interest charged by commercial banks, as unconstitutional. Following the judges’ decision, the law was declared null and void.
The court gave a period of one year before the ruling to takes effect. The time is to allow legislators to make amendments and also for banks and their customers to align to the change.
Related; Improved access to credit not guaranteed even after court ruling on rate cap – Analysts
