Kenyans are set for more suffering after President Uhuru Kenyatta's Thursday rejection of the Finance Bill of 2019.
The bill, which Uhuru sent back to Parliament to be amended, means that Kenyans will pay more for loans after he sought the removal of the clause capping interest rates.
This comes as a retreat from his 2016 move, where he signed in the Banking (Amendment) Bill, which sought to cap the interest rate at not more than 4 per cent.
His move now means that banks are once again free to charge as high as they wish, which goes against Uhuru's 2016 wish to save Kenyan from the claws of banking institutions.
"These frustrations are centred around the cost of credit and the applicable interest rates on their hard-earned deposits. I share these concerns,” he said.
However, he now says that the bill has done more harm than good, and has failed to live to his expectations, instead of dealing a blow to micro, small and medium-sized enterprises.
He added that the cap has also made it harder for small scale businesses and individuals to secure loans.
“Most commercial banks adjusted their lending business models towards large corporates and the public sector, and away from small-scale borrowers and individuals,” he added.
Uhuru's technical removal of the cap comes after intense campaigns by banks and the Central Bank of Kenya (CBK) for a review of the capping regulation.