There are grave concerns they have saddled borrowers with high-interest rates, which rise up to 520 percent when annualised, leading to mounting defaults and an ever-ballooning number of listed defaulters.
The decision by the parliamentary committee on Finance and National Planning to add a clause that gives the CBK powers to price interest rates for digital loans raised concerns about possible rate caps.
The abuse in the mobile digital loans space has attracted a lot of regulatory scrutinies and multiple efforts to protect consumers from predatory lending.
There are grave concerns they have saddled borrowers with high-interest rates, which rise up to 520 percent when annualised, leading to mounting defaults and an ever-ballooning number of listed defaulters.
This has informed the proposed Central Bank Amendment Bill 2021, which seeks to regulate their products, management, and sharing of borrower information.
The decision by the parliamentary committee on Finance and National Planning to add a clause that gives the CBK powers to price interest rates for digital loans raised concerns about possible rate caps.
CBK Governor Patrick Njoroge has since clarified that the rate cap route is not one he supports given the experience of the limits introduced on banks in 2016.
That is the right decision. Rate caps slowed down private sector credit growth as commercial banks turned their backs on millions of low-income customers as well as small and medium-sized businesses deemed too risky to lend to.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
