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Kenyan National Treasury issues 2018 draft bill for financial sector

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Kenyan National Treasury issues 2018 draft bill for financial sector

Kenya's National Treasury disclosed a draft financial markets conduct bill for 2018 after carrying out a review of the country's consumer credit and market conduct.

The draft law intends to create effective financial consumer protection in Kenya, make credit more accessible and support financial innovation and competition at the same time. The bill will also attempt to establish Kenya's Financial Markets Conduct Authority, Financial Sector Ombudsman and Financial Sector Tribunal.

The draft also retains the state's cap on interest rates, which was introduced in 2016 and limits how much lenders can charge on loans at no more than 4 percentage points above the Central Bank of Kenya's base rate, despite National Treasury Secretary Henry Rotich calling the caps "unsustainable" and pledging to reform or remove them.

Kenyan lenders will not be allowed to or attempt to charge or recover from borrowers any amount of interest under contract that exceeds the maximum rates, as prescribed by the authority from time to time, according to the document.