Kirinyaga Governor Anne Waiguru on Wednesday, November 6, rubbed citizens the wrong way with her remarks favouring the scrapping of the interest rate cap by the National Assembly the previous day.
Taking to social media, Waiguru made clear her agreement with the plan which was recommended by President Uhuru Kenyatta, stating that if the government borrowing was tamed, then the rate cap removal would not be injurious to the Kenyan population.
"The interest rate cap removal can only benefit Kenyans if we tame government appetite for borrowing from commercial banks by (1) Stopping Government from borrowing from commercial banks altogether; or, (2) Significantly reducing or capping government interest at a maximum 50 per cent of lowest commercial rates," she had stated.
The interest rate cap had been criticized in some quarters that it made banks less willing to offer loans to the private sector, in favour of lending the government.
With less credit available for expansion and operation of businesses, growth in the private sector was reported to have stagnated.
Her remarks sparked outrage amongst social media users who saw the statements as an affront to the plight of Kenyans who have been left at the mercy of lenders after the MPs controversial move.
"I always ask myself one question, if this is a whole elected governor complaining like a common mwananchi, instead of calling other leaders to address it with the president, where and what will a common mwananchi say or do?" Wondered Johnson Nderitu.
"Madam governor, most of the Kenyans you are talking about cannot afford decent housing, a proper meal, and a medical cover. So removing the interest cap on bank loans will impact negatively on the life of the common mwananchi due to the exorbitant bank interests," Alex Mwaniki appealed.
"So, after all, you know what should be done right but ignore? You were in Uhuru's first cabinet and you did nothing," Charles Gatere responded.
Another user corrected Waiguru's assertions, stating that the MPs removed the cap because they had interests in the banking industry.
"Your argument madam would only have held water if our leaders didn’t have interests in the banking sector. That way, they would have protected the interests of Wanjiku. As it is, the interests will shoot upwards since you and I know the banking sector stakeholders," Carole Gicheru stated.
Others claimed that the reason the country was in such a quagmire was that the government had taken to borrowing more than it could afford to pay.
"The problem with the Jubilee government is having an appetite for the things we can't afford it's like going to drink champagne on a beer budget," Emannuel Sore regretted.
With the removal of the rate caps, banks have been given the leeway to decide their own interest rates, contrary to the 2016 legislation, which amended Section 33B of the Banking Act to cap the interest rates chargeable by banks to a rate that is not higher than 4 per cent of the Central Bank Rate (CBR).
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