Kenya proposes law to control money lenders
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.