The National Treasury proposal to amend section 33 (b) of the Banking Act contained in the Finance Bill 2019 is strongly opposed by the parliamentary committee members.
Parliamentary committee members claimed that if the capping of interest rate is removed, Kenyans will be subjected to expensive credit at the expense of commercial banks.
The acting National Treasury Cabinet Secretary Ukur Yattani in meeting with, his Principal Secretary Dr. Julius Muia and officers from Kenya Revenue Authority (KRA), to consider the bill, members of the Finance and National Planning Committee of the National Assembly opposed the move saying it will make bank loans expensive and unbearable for Kenyans.
Talking at a meeting chaired by Kipkelion East MP Joseph Limo, the acting Treasury CS told the committee that interest rate capping affects the Small and Medium Enterprises (SMEs) lending.
Ukur Yatani noted that the move to cap interest rate has not worked well; the controls have had serious effects on the credit to the SME sector.