Equity Bank has lowered their interest rates to 13.5 per cent, aligning to the Central Bank’s Monetary Policy Committee meeting which lowered the base lending rate to 9.5 percent.
The Banking Act, Banking (Amendment) Bill 2015 caps banks’ lending interest rates to no more than four per cent above the Central Bank Rate (CBR).
In a notice, the new interest rates will affect all loans issued by the bank including micro loans, mobile loans as well as credit cards. It will also include all new and existing loans.
In Kenya, six banks control more than half of the entire industry of 42 banks.
The caps, two years down the line have restricted majority of loans to government as banks consider SMEs high risk. There are ongoing conversations to review the law, to ease access to credit and support businesses to grow faster.