There is no indicator that had the interest rates remained unregulated, the government would have borrowed less.
With no ceiling, rates would have started climbing to the mid-twenties because of irresponsible government borrowing, just like the Cheserem days when TBills hit an eye-watering return rate of 31%. The government was a simple money minting machine for banks back then.
The net effect would have been businesses getting starved of credit anyway.
If the government does not stay the course and reverses the law, it will all have been pointless. Now, Rotich needs to put his thinking cap on and finds another source of money to plug holes and reduce reliability on expensive domestic credit, we need a fiscal disciplinarian, wield a big club and smash heads if a whiff of waste is detected at ministries,..counties...and the good doctor at Central starts squeezing bankster balls. The Trifecta.
Now is not the time to relent, it is time to disembowel and exsanguinate large scale usury and predatory practices in our financial system once and for all, even if it causes us some temporary pain.
We survived 24 years of Moi for God's sake.

Let me advance my River road economic theory a bit further.

Other than our ' western economists' spelling doom and gloom for banks and the economy due to rate caps, I fail to see how rate caps can be bad for the the middle class, if indeed middle class drive this economy. We have a middle class that cannot afford 150/- unga so now we have subsidized unga at 90/-. But carry on

Lack of access to loans by middle class means less purchasing of imported, useless luxury, consumption items. How can this be bad for the economy?You do realize by economics we simply mean what ordinary folks do to improve their welfare i.e. standard of living by being productive. If there is demand for useless luxury items then someone has to supply

It means less buying of useless pieces of land to hold for x years and sell to the next sucker that comes along. Means less land price inflation. How can this be bad for Kenya? Isn't the market rewarding the person who took the risk to hold that useless piece of land for x years who then sells and improves his living standard. Isn't that person important in the economy for taking that risk of holding useless pieces of land. You do know land transactions support a whole chain of people lawyers,
valuers, brokers etc.

It means less building of mansions in remote places on loan and spending in ordinate amounts of fuel and time getting to and from work while struggling to pay off your loan. How is this bad on a macro economic scale? You think the fundis building those mansions don't need employment. Does it mean the person who built that mansion will now afford land near the city?

It means better planned and executed businesses with proper records and a growth plan , eager to build a credit history and maintain a good credit rating so as to attract cheap bank credit. If your customers can't afford your goods and services in cash or on credit(collapse of purchasing power) your meticulous business plan will not survive first contact with the market.

It means no more bank funded side hussles like taxi business on loan from an unsecured salary loan. Businesses that inevitably fail or remain mediocre at best despite rosy initial projection. Aren't those side hussles responding to consumer demand and isn't the economy the sum total of all those exchanges of goods and services. The only issue is no bank worth it's name will risk it's capital and deposits to fund such a venture at 14% interest. At 23% interest those side 'hussles' were breaking even and thriving

Any seasoned entreprenuer will tell you that you dont need loads of cash to succeed. Infact, too much cash at the beginning will be your down fall. You're kidding right?

My river road economic theory is based on above observations. In my view, a bit of starvation and dieting from credit, useless credit that does not help a business grow, is a good thing. This is terrible theory but from the comments on this thread actually this is economic thinking ruling this time. How about we starve the govt it doesn't need all the useless credit it's taking.

I am still waiting for the example of a 35% return business that woul qualify for a well regulated bank loan.

Let me advance my River road economic theory a bit further.

Other than our ' western economists' spelling doom and gloom for banks and the economy due to rate caps, I fail to see how rate caps can be bad for the the middle class, if indeed middle class drive this economy. We have a middle class that cannot afford 150/- unga so now we have subsidized unga at 90/-. But carry on

Lack of access to loans by middle class means less purchasing of imported, useless luxury, consumption items. How can this be bad for the economy?You do realize by economics we simply mean what ordinary folks do to improve their welfare i.e. standard of living by being productive. If there is demand for useless luxury items then someone has to supply if all we are purchasing is imported junk, how does this translate to growth of our economy. How does getting a loan to import mitumba increase the country's productivity.

It means less buying of useless pieces of land to hold for x years and sell to the next sucker that comes along. Means less land price inflation. How can this be bad for Kenya? Isn't the market rewarding the person who took the risk to hold that useless piece of land for x years who then sells and improves his living standard. Isn't that person important in the economy for taking that risk of holding useless pieces of land. You do know land transactions support a whole chain of people lawyers,
valuers, brokers etc. this thinking right there is what is wrong with ' western economist'. How does hoarding land, just because you can, translate to overall social good. Why is it evil to hoard unga so as to sell at a higher price later, but perfectly all right to hoard land and we call this economic freedom. Land is a limited resource. It should be managed to produce maximum return for the country.

It means less building of mansions in remote places on loan and spending in ordinate amounts of fuel and time getting to and from work while struggling to pay off your loan. How is this bad on a macro economic scale? You think the fundis building those mansions don't need employment. Does it mean the person who built that mansion will now afford land near the city? people will be more inclined to pool resources and build. Construction will go on.

It means better planned and executed businesses with proper records and a growth plan , eager to build a credit history and maintain a good credit rating so as to attract cheap bank credit. If your customers can't afford your goods and services in cash or on credit(collapse of purchasing power) your meticulous business plan will not survive first contact with the market. I will not even respond to this.

It means no more bank funded side hussles like taxi business on loan from an unsecured salary loan. Businesses that inevitably fail or remain mediocre at best despite rosy initial projection. Aren't those side hussles responding to consumer demand and isn't the economy the sum total of all those exchanges of goods and services. The only issue is no bank worth it's name will risk it's capital and deposits to fund such a venture at 14% interest. At 23% interest those side 'hussles' were breaking even and thriving talked like a true theory person. Which side hussle can survive when started on a 25% interest loan. Wacha siasa bwana. Lets be practical. Hata matatu haiwezi.

Any seasoned entreprenuer will tell you that you dont need loads of cash to succeed. Infact, too much cash at the beginning will be your down fall. You're kidding right? no I am not .

My river road economic theory is based on above observations. In my view, a bit of starvation and dieting from credit, useless credit that does not help a business grow, is a good thing. This is terrible theory but from the comments on this thread actually this is economic thinking ruling this time. How about we starve the govt it doesn't need all the useless credit it's taking.

I am still waiting for the example of a 35% return business that woul qualify for a well regulated bank loan.