Kiambu MP Jude Njomo (pictured) has said lamakers have unanimously agreed not to review the cap on interest rates as per the wishes of the people.
Speaking on Wednesday at Kangoya village in Kiambu town during the ground breaking for tarmacking of Kangoya-Ndumberi road in Kiambu which will cost Sh700 million, Njomo said Kenyans feel burdened by high interest rates charged by banks.
“I have spoken to my fellow leaders and their response is they will represent the will of the people. Kenyans want low interest rates,” Njomo said.
Banks are not allowed to charge customers a rate higher than four per cent above the benchmark rate set by the Monetary Policy Committee.
Njomo, who sponsored the Bill capping the interest rates, which was passed and became law, said the Central Bank of Kenya cannot purport to change a law and should not review the charges on their own. The bank should follow the law, he said.
“The CBK has no mandate to review the interest charges and should implement what was passed by Parliament and signed by the President,” Njomo said.
He said the International Monetary Fund request to have the capping of interest rates scrapped would have negative implications on borrowers.
“The IMF can say what they want, but at the end of the day there is the Kenyan law that must be upheld and borrowers’ plight addressed,” Njomo said.
The IMF has since advised the government to review the interests rates cap as the interest rate controls are undermining the effectiveness of monetary policy aimed at ensuring price stability and supporting sustainable economic growth.