Kenya’s government published an amendment to its banking law regulating how much lenders can charge for loans, yet failed to give more details on how the legislation that comes into effect on Sept. 14 will be implemented.
President Uhuru Kenyatta approved the law last month, reintroducing interest-rate limits that were done away with in July 1991. The amended Banking Act requires lenders to peg credit costs at 400 basis points above a benchmark central bank rate and compels financial institutions to pay interest of a minimum of 70 percent of the same rate on deposits.
“We are still in this period of ambiguity and a lack of clarity,” said Aly-Khan Satchu, chief executive officer of Rich Management, a Nairobi-based adviser to companies and wealthy people. “It’s not a positive situation really. There are some key issues that are outstanding: the base rate, who’ll set it, what it is, among a number of other issues.”
