- Uhuru signed the 2019 Finance Bill on Thursday, November 7
- The repeal of section 33b of the Banking Act is expected to enhance access to credit by the private sector
- Banks will, however, price loans depending on their own risk assessment
President Uhuru Kenyatta has signed the Finance Bill 2019 into law two days after parliament adopted his memorandum seeking to scrap interest rate caps on bank loans.
The Finance Act 2019, among other provisions, repeals section 33 (b) of the Banking Act that provides for the capping of bank interest rates.
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The president appended his signature to the bill on the morning of Thursday, November 7, at State House, Nairobi.
“The repeal of section 33b of the Banking Act is expected to enhance access to credit by the private sector especially the Micro, Small and Medium Enterprises (MSME's) as well as cut out exploitative shylocks and other unregulated lenders,” a tweet by State House read.READ ALSO: Churchill Show comedian Njenga Mswahili found dead
Following the signing of the bill, banks will now be free to price loans depending on their own risk assessment.
This was after the president rejected National Assembly's proposal to retain caps on interest rates that banks could charge on loans in a memo on Thursday, October 17.
The interest capping law became operational on Wednesday, September 14, 2016, and was implemented following concerns raised by the public on the high cost of credit in Kenya.
Critics, however, argued it did not achieve its intended purpose calling for its amendment.
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