KCB Group has welcomed the decision by the National Assembly to lift the cap on interest rates.
KCB Group Chief Executive Officer Joshua Oigara said customers should not expect a sudden increase in the interest rates following the amendment of the Finance Bill, 2019 to accommodate the President’s Memorandum.
“The macroeconomic and business environment where we are today does not at all support an environment of high rates,” Oigara said.
Speaking during a press conference on Wednesday, Oigara said allowing banks to price the risk of borrowers is important.
“As an industry, we are in a new equilibrium. Banks have reached a new business model," he said.
“Banks are ready to lend. So we are going to see more people including SMEs start accessing credit in the industry. Customers with high-risk profiles we may see a 2-3% increase. We are not going to see a massive change. As a leader in the industry, we don't see an opportunity to go back to the old behaviour of high rates."
Parliament was again forced to adjourn on Tuesday after MPs walked out following the passage of the law setting stage for banks to charge interest rates on loans as they please.
Kenyans will now borrow loans from banks at interest rates defined by the financial institutions.
This was after MPs failed to raise numbers required to overturn President Uhuru Kenyatta's reservations of their earlier attempt to retain the limits on interest rates at 14 per cent.
