ICPAK wants interest rate cap law for two more years

Accountants are pushing for a two-year extension on law capping interest rate saying its full benefits are yet to be realised.

The Institute of Certified Public Accountants of Kenya (ICPAK) told Parliament the law on rate caps has instilled discipline in the economy in general.

“Our proposal is that the interest rates are capped for another two years to allow full realisation of their intended purpose,” ICPAK public tax committee chairman Phillip Mwema told the National Assembly Finance committee during public hearings on the Finance Bill on Thursday.

Mr Mwema noted that the law capping interest rates has instilled discipline amongst borrowers, explaining a drop in auctioning incidents.

“The capping has protected naïve and ignorant borrowers from agreeing to loan terms that they would eventually default,” he said.

The rate capping law championed by Kiambu MP Jude Njomo came as a relief in 2016 to many bank customers as it ended expensive loans.