Co-op bank directs units to cap loan prices at 14.5pc

Co-operative Bank has capped pricing of all new loans at 14.5 per cent, becoming the first bank to indicate it is complying with the new law on interest rates even as banks continue to argue that they are unsure of the base rate to use for loans.

In a break with the position of the Kenya Bankers Association (KBA) that lenders would wait for guidelines before effecting any changes to their lending structure, Cooperative Bank cited the section of the Act that bars any new loan contract exceeding the prescribed rate as the reason for its move.