Lawyer petition to reduce interest on mobile loan applications

The Kenya Bar Association (LSK) filed a petition asking the government to limit interest on mobile loans that were taken by most Kenyans.

LSK complained that lenders were accusing borrowers of very high interest and through In Good Standing they would seek to reduce the cost. The lawyers added that they would ask for the amendment of the Consumer Protection Act as provided for in the constitution.

"In all credit agreements, interest will automatically cease to accrue when they are equal to the principal outstanding, and interest accrued to the President LSK Allan Gichuhi.

The Corporation noted that Creditors charged a five per cent interest by They argued that the Consumer Protection Act did not adequately cover borrowers against exploiting creditors.

"These provisions must, for the avoidance of doubt, also apply to mortgage service providers and mobile loans," Allan stressed.

If the move by LSK is updated, it would mean that the lorry paid interest would cease to increase if the outstanding debt became equal to the interest. see Kenyans pay lower fees especially if we have taken a longer period to repay the loan.

In 2016, Kenya capped interest rates up to four percent according to a new directive from the Central Bank of Kenya. The goal was to ensure that small and medium-sized businesses had access to loans at affordable rates.

However, in January 2018, CBK Governor Patrick Njoroge appealed the new directive.

"Until now, interest rate caps have been a break for the economy.The economy is restrained by this.It is something we must be put forward and treated in ways that support rather than inhibit economic dynamism. "

President Uhuru also shared the same sentiments, saying that the government would seek to repeal [19659002] "We recognize that it is necessary to completely abrogate or modify it to address some of the problems and concerns that have been raised, particularly in the financial sector," he said.