All eyes are now on commercial banks and lenders, after President Uhuru Kenyatta's nod for them to once again regulate their own loan rate caps.
Three years ago, the President signed another law capping the loan interests rates at a time when some banks were charging as high as 25% interest.
However, Uhuru on Thursday handed the power back to the banks by signing the Law Finance Bill (2019), which could subject Kenyans to higher loans rates once again.
However, the banks have pledged not to return to their exorbitant rates, with Kenya Bankers Association (KBA) Chair Joshua Oigara promising sobriety.
“The fear that we will be unreasonable is unwarranted as we have repriced ourselves in the last three years. The pricing by banks is not something you wake up and roll the dice on,” he said on Wednesday.
Oigara spoke during the launch of Stawi, a loan facility targeting small business ventures, which also gives unsecured loans of between Sh30,000 to Sh250,000.
Uhuru argued that by lifting the ceiling, the will enhance cash flow in the economy, adding that it will make it easier for micro, small and medium-sized enterprises to access funding.
"The repeal of section 33b of the Banking Act is expected to enhance access to credit by the private sector especially the micro, small and medium enterprises as well as cut out exploitative Shylocks and other unregulated lenders,” he said.
Banks and lenders had been complaining that the ceiling has interfered with their operations due to reduced profit on loans.