Kenya pro­poses law to con­trol money lenders

Banking Frontiers - - News -

The Cen­tral Bank of Kenya may en­act a law to bring all for­mal and in­for­mal short term money lend­ing en­ti­ties un­der its con­trol. A mem­ber of par­lia­ment has moved a bill to this ef­fect and it is ex­pected to be passed. The bill also en­vis­ages cap­ping of in­ter­ests charged by mi­cro fi­nance or other money lend­ing set-ups. It is a known fact that in­for­mal set-ups in the coun­try levy up to 20% monthly in­ter­est, which means up to 240% per an­num. Banks are nor­mally not al­lowed by law to charge more than 4% in­ter­est above the cen­tral bank’s lend­ing rate.

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