A week after the President signed the Interest rates bill into law, the banking industry which at first seemed to have been in shock is slowly starting to comply. It seems that the banks did not expect that Uhuru would sign the bill into law given that his family owns a bank but in this case politics won the day. So far the banks that have reduced their interest rates include;
1. Cooperative Bank (Coop Bank)
All NEW credit facilities from Co-op Bank shall be offered at a rate not exceeding 14.5% Read More https://t.co/2urS8gyd8m
— Co-op Bank Kenya (@Coopbankenya) August 26, 2016
2. Chase Bank
We are now lending at 14.5% says our Receiver Manager Paul Russo @Saagite who is now on air at @HomeboyzRadio with GMONEYizME. Tune in.
— Chase Bank Kenya(IR) (@chasebankkenya) August 30, 2016
3. Barclays Bank
We have with immediate effect reduced the interest rates applicable for all new loans to 14.5% p.a in line with the new law. 1/2
— Barclays Bank Kenya (@Barclays_Kenya) August 29, 2016
Equally, we have increased interest rates applicable on new Zidisha savings accounts & new term deposits to a minimum rate of 7.35% p.a. 2/2
— Barclays Bank Kenya (@Barclays_Kenya) August 29, 2016
4. Kenya Commercial Bank (KCB)
5. CFC Stanbic Bank
All the banks that have announced compliance have stated that it is the new loans that will be priced at 14.5%. The old loans will remain at the old rates until such a time as the Central Bank gives direction on which rate to use for the old loans. However, CFC Stanbic has taken the lead in reducing the rates of old loans.
In as much as the banks have announced a reduction in the rates for loans, I still do not feel cause to celebrate. This is due to the fact that they may announce a lower interest rate but decline to approve loan applications hence denying applicants credit. At the risk of being considered a naysayer, my honest opinion is that the new law capping interest rates might not succeed in making credit accessible to all.