In September 2016, the Parliament supported the interest rate cap that allowed banks to charge 4 percentage points above the central bank benchmark rate at 9 per cent. However, on 5 November 2019, the interest rate cap law was repealed after the President refused to assent into law Finance bill 2019. Uhuru directed the Parliament to scrap off the cap rate which he believed had led to a decline in economic growth and escalating growth of shylocks in the market.
Since 2016, Kenyans have enjoyed loan at lower rate, but on the hand other hand many business and individuals considered to be risky customers, due to lack of cash flow or collateral, have had difficult times accessing loans. Although the move to repeal the interest rate is celebrated by the commercial banks, many customers who are currently servicing their loans are only hopeful that the rate of interest will not affect their ongoing loans.
With removal of interest rates caps banks can now access their clients and charge interest depending the risk involved. This move is expected to enable more small businesses access loans, something that will boost the economy