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Effects of interest rate ceilings on the operations of microfinance in Kenya: case study of Kenya Women Finance Trust Limited
(Kampala International University, College of Economics and management, 2010-12) Gatobu, Maureen N.
Micro finance includes the entire spectrum of financial services for broad sectors of the population, but particularly for the poor, but refers not only to small and micro loans, but also saving products to savings products insurance and money transfers. In short, microfinance means specialist financial services to disadvantaged people the study aimed at investigating how interest rate ceiling affect the availability of credit to the marginalized poor in Kenya. The microfinance institutions in Kenya have been charging high interest on the loans hence discouraging borrowing as the loan tend to be expensive for the poor. The objectives and hypothesis of the study vigorously focused into the trends, causes and implications of this notion. For microfinance to achieve their objective of making credit available, they have to eliminate predatory lending to the poor Kenyans. The government has also to involve the microfinance institutions in their discussion table when setting the interest ceiling rate for them. This will ensure the interest charged by the microfinance will allow the profitability and growth of the institutions as well facilitate the availability of credit to the poor.