Those are very strong words to use on a governor who pioneered Mpesa introduction into the economy.. He had his flaws, but he is a professor and a sharp mind

I think the truth remains the truth...irrespective of whether its being said by a 'fake/corrupt' professor or a 'genuine/uncorrupt' professor...The truth is the truth because it is the truth and not because of the deliverer of the message.

Nicely done article. However, it is more theoretical than practical when it comes to how banking is actually conducted. I have never gone to a bank for a loan and been told to provide certain information about myself and my intended use of the money and then based on that info. they will get back to me with the interest rate they will offer me the loan at.

Certain individuals are also " risk free" in a sense but Kenyan banks categorise everyone as high risk.

Goverments are not necessarilly risk free as we are well aware. Thats why we have junk bonds.

So, "western economists" will always try to argue from many theoretical stand points about bank rate control. Bottom line, its all theory. None of those theoretical facts apply when the rubber meets the road, or when customer meets banker.

How come we did not get fuel shortage with fuel price control.

Why do banks insult our intelligence when they say they will happily lend to Wanjiku at 25% , but if we lend to her at 14%, she might default.

Banks are holding the country hostage on fake pretencious economic theories that they themselves do not apply. We need the next leader to have balls of steel, stare them in the face, revamp nbk and arm twist kcb and coop into lending at 14%. Then we see what the rest will do.

@Flo-ology.

Your points are invalid.

The good professor was not even talking to Kenyans. He was addressing Ugandan bankers.

Has he also been corrupted by them?

This rate cap stinks.

More harm than good,making it bad.

How come no one laments about the thousands who have been auctioned by banks, sometimes illegally, partly due to high interest rates that are hiked irregularly halfway through the loan term.

How about the thousands that took mortgages at 15% during kibaki error then found themselves paying 22% shortly after. Who will pay them back for lost income and depression they have suffered.

Point is, there are 2 sides to every coin. Lets not just focus on negatives of rate control and Yap about it all day. Rate control is a good tool to control our banks and hopefully channel capital where it will have maximum assured return. No more money for tenderpreneurs and cowboys wa kubahatisha biashara. Money should go to established businesses with ability to repay and secondly to individuals with clear ability to repay. Banks have been playing Russian roulette with us and we pick up the tab in high interest rates.