Insights and analysis

The unintended consequences of Kenya’s interest rate cap

Access to credit for SMEs in Kenya

Economist Anzetse Were highlights the emerging effects of Kenya’s capping of loan interest rates by banks. The country, in a bid to provide reprieve to borrowers and enhance availability of credit, earlier this year mandated commercial banks to set lending rates at no more than 4 percentage points above the central bank’s benchmark interest. As Anzetse explains, the result of the action may be the exact opposite of what was intended. Read on…

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