NAIROBI, KENYA, Mar 31 – Kiambu MP Jude Njomo, the man who initiated the interest rate capping law has assured Kenyans that MPs have agreed to retain the cap despite the High Court finding that they are unconstitutional.
Njomo said Parliament has the mandate to address matters of public interest, and a cap on the price of loans was one of them.
“As Members of Parliament who worked so hard to enact this legislation we have resolved that we will ensure the interest rate cap remains. We will not let the cartels in the banking sector get an avenue to exploit Kenyans again,” he said.
The Court gave Parliament a year to iron out the unconstitutionality in the law, setting the ground for a fierce economic battle between protectionists and liberals in the country.
Boniface Oduor, the petitioner, asked the court to determine constitutionality of the provisions of the Banking (Amendment) Act, which criminalizes charging of interest rate by financial institutions at more than four percentage points above the Central Bank Rate set and published by Central Bank of Kenya.
Consumer Federation of Kenya filed an appeal against the High Court determination delivered mid this month.
The World Bank and IMF have been pushing for the repeal of the cap since 2017 when the Act was enacted.
The institutions stepped up pressure on Kenya to review the interest rate controls, saying they were hurting SMEs.