KenyagistMP's Move That Will See You Punished for Accepting...

MP’s Move That Will See You Punished for Accepting Some Loans

-

- Advertisment -spot_img

Kiambu MP, Jude Njomo, has tabled a bill in parliament that if passed, will see loan borrowers punished for accepting some loans.

The bill proposes that anyone that accepts a loan with higher interest than the set cap will face a fine of not more than Ksh1 million or a maximum of one year in jail.

Njomo, who was also the architect behind the interest cap placed on bank loans, moves to try and tame the rampant mobile lending apps that charge high interests on their loans.

Kiambu MP Jude Njomo

The regulations, if passed by the August house, will empower the Central Bank of Kenya to keep tabs on the interest caps.

As it stands, the penal provision under subsection (3) is couched in discriminatory terms as it applies only to banks and financial institutions yet the legal obligation is aimed at both the bank/financial institution and the borrower/customer… amendment) is therefore necessary as it seeks to create a penal provision that is not discriminatory,” Njomo noted in the memo attached to the bill.

Introduced in September 2016, the cap limits lending rates to 4 percentage points above the central bank rate, currently at 9 per cent.

The cap was supposed to cut the costs of credit for businesses and private consumers, boosting access to loans.

This new bill published July 5, is seen as an attempt to reinforce the rate cap, which had been suspended by Treasury CS, Henry Rotich, during his budget speech, and make it constitutional in line with a March 2019 high court order.

In the ruling, the court gave Parliament a year to redraft the law capping rates, stating that the original one was vague and that terms like ‘credit facility’ and the ‘Central Bank Rate’ (CBR) are open to misinterpretations.

In the latest draft bill though, Njomo appears to fix the wording in line with the High Court’s ruling with ‘credit facility’, now reading ‘loan’ and defining the ‘rate’ as the one captured under section 64 of the Central Bank Act.
 

Embattled CS Henry Rotich

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest news

Was ist eine toxische on-off-beziehung?

Was ist eine toxische on-off-beziehung?What is a toxische on-off-beziehung? a toxische on-off-beziehung is a type of relationship where one...

Ex-Govt Official in Ksh1.3 Billion Scandal Hospitalised After Court Release

Former Nairobi Provincial Commissioner Davis Nathan Chelogoi is set to receive ongoing medical treatment at a hospital in the...

Raila Allies Pile Pressure on Ruto as Talks Hit Dead End

National Assembly Minority Leader Opiyo Wandayi, a close ally of opposition leader Raila Odinga and a senior member of...

'They’re Jealous of Me', Nakhumicha Over Recent Criticism

Cabinet Secretary (CS) for Health Susan Nakhumicha has strongly condemned the individuals criticising her over allegations of underperformance within...
- Advertisement -spot_imgspot_img

Court Orders City Lawyer Behind Ksh 283M Scam to Refund Loot

The High Court on Thursday ordered a Nairobi lawyer to refund Ksh25 million he is accused of obtaining fraudulently. While...

How to Buy Cryptocurrency with M-Pesa in Kenya: A Step-by-Step Guide on Binance

Are you a Kenyan interested in purchasing cryptocurrencies using M-Pesa? Although direct purchases of cryptocurrencies via M-Pesa are currently...

Must read

Was ist eine toxische on-off-beziehung?

Was ist eine toxische on-off-beziehung?What is a toxische on-off-beziehung?...

Ex-Govt Official in Ksh1.3 Billion Scandal Hospitalised After Court Release

Former Nairobi Provincial Commissioner Davis Nathan Chelogoi is set...
- Advertisement -spot_imgspot_img

You might also likeRELATED
Recommended to you