Nairobi, KENYA: President Uhuru Kenyatta’s move to sign into law the capping of bank interest rates has been welcomed by real estate company HassConsults.
During a press conference in Nairobi on Monday, Head of Research and Marketing HassConsults Sakina Hassanali has said capping of interest rates is a sure way of making the real estate market robust.
“Capping of interest rates will have a twin effect on making the property market. This is because credit will be made available to developers and this will reduce the cost of units coming into the markets,” said Sakina.
Ms. Hassanali noted that reduced rates would attract potential borrowers incentives to take up mortgages and other loan facilities.
“Cap on interest rates would reduce the rates the banks put on customer deposits, especially large depositors. Lower returns on such customer deposits will act as a catalyst for alternative high yielding assets and traditionally real estate has proven to be the most consistent asset in performance,” she remarked.
She added that such instances would bring anticipation towards high capital flows into the real estate market.
Assenting to interest cap
On July 28, 2016, the National Assembly passed the Banking (Amendment) Bill, 2015.
The Bill intended to regulate interest rates that are applicable to banks’ loans and deposits, capping the interest rates that banks can charge on loans and must pay on deposits.