Kenya loan rate cap declared unconstitutional
According to the Central Bank of Kenya, the High Court of Kenya has ruled that the loan rate cap is unconstitutional. In a case filed by Boniface Oduor against the Attorney General and Central Bank of Kenya, Boniface challenged some procedural elements of the implementation of the rate cap law, arguing that it should have been discussed by the Senate.
The rate cap law will still be effective for a period of 12 months. In the ruling, the loan rate cap law was declared null and void but, to avoid disruption in the market, the court suspended the effect of the ruling for 12 months. This means loan yields over the next 12 months will still be subject to the limit of 400bps above the central bank rate.
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