let people negotiate rates depending on their credit history /collateral and financial discipline

what people don't know is that banks offer lower interest on client's who have build a good credit history but you must start from that high point as a stranger

Before we look at the law or economic argument of this proposal, the Kenyan culture unfortunately disregards payment of debt. Majority of Kenyans have no intention of paying debt even when they know they took the loan and the loan assisted them.
For instance how many Kenyans have paid their HELB loans including the middle class? This has lead to unorthodox means by HELB including threatening to withholding marriage certificates so that people can pay.
Look at how nag their tenants before they can give back their deposits.
This culture puts a premium to any lendor because of the cost of recovering money.
Kenya is a also generally a cash economy and therefore majority do not have credit history. The few who have a history the record is not very appealing.
Kenya is still a poor third world country with only a few who are financially stable. The majority middle class are not investing in assets but fassets which do not add any economic value.

Maybe we are missing the key point, which should be the question, can banks remain profitable if interest rates are capped?? I think they will survive, though mobile money will be hit hard since currently it goes for 72% per annum and people actually borrow at such rates willingly!!!