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Central Bank Of Kenya Set To Abolish 14% Interest Cap On Loans

The Kenyan central bank sits in central Nairobi, Kenya, on Thursday, Feb.10, 2011. KenyaÕs current-account deficit widened to $1.92 billion in the year through October from $1.75 billion a year earlier following increased imports and reduced short-term flows, the central bank said. Photographer: Trevor Snapp/Bloomberg

 

Central Bank

The Central Bank Of Kenya governor Patrick Njoroge has announced that the regulator is set to abolish the 14% interest on loans.

He said that the interests caps had a problematic effect on the economy and the general banking sector.

The regulator said they wanted to go back to the old regime of freely determining the cap of interested rates but under a regulated environment.

Read:KCB Group Beat the Odds to Post Ksh 10.2 Billion Profit in Six Months

The central bank of Kenya has had a meeting with banks and they agreed to present business models that will encourage a disciplined credit market.

The governor believes this move to abolish the cap with an adequate business model will increase the disciplines in the credit sector.

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Written by Merxcine Cush

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