Kenya Says Loan-Interest Caps Officially Begin on September 14

(Bloomberg) -- Kenya’s government officially published an amendment to its banking law regulating how much lenders can charge for loans on Friday and said lenders must comply by September 14.

President Uhuru Kenyatta approved the law last month reintroducing interest-rate limits that were done away with in July 1991. The amended Banking Act requires lenders to peg credit costs at 400 basis points above a benchmark central bank rate and also compels financial institutions to pay interest of a minimum of 70 percent of the same rate on deposits.

“A person shall not enter into an agreement or arrangement to borrow or lend directly or indirectly at an interest rate in excess of that prescribed by law,” the government said in a notice published in the Kenya gazette on Friday.