Do interest rate controls work? : evidence from Kenya /

Do interest rate controls work? : evidence from Kenya /

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Bibliographic Details
Author / Creator:	Alper, C. Emre, author.
Imprint:	[Washington, D.C.] : International Monetary Fund, [2019] ©2019
Description:	1 online resource (22 pages)
Language:	English
Series:	IMF Working Paper ; WP/19/119 IMF working paper ; WP/19/119.
Subject:	Banks and banking -- Kenya. Interest rates -- Kenya. Monetary policy -- Kenya. Banks and banking. Interest rates. Monetary policy. Kenya.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12510162

Hidden Bibliographic Details
Other authors / contributors:	Clements, Benedict J., author. Hobdari, Niko A., author. International Monetary Fund, issuing body.
ISBN:	1498317731 9781498317733
Notes:	Online resource; title from PDF title page (IMF, viewed Sept. 1, 2020).
Summary:	This paper reviews the impact of interest rate controls in Kenya, introduced in September 2016. The intent of the controls was to reduce the cost of borrowing, expand access to credit, and increase the return on savings. However, we find that the law on interest rate controls has had the opposite effect of what was intended. Specifically, it has led to a collapse of credit to micro, small, and medium enterprises; shrinking of the loan book of the small banks; and reduced financial intermediation. We also show that interest rate caps reduced the signaling effects of monetary policy. These suggest that (i) the adverse effects could largely be avoided if the ceiling was high enough to facilitate lending to higher risk borrowers; and (ii) alternative policies could be preferable to address concerns about the high cost of credit.
Other form:	Print version: Alper, Emre. Do Interest Rate Controls Work? Evidence from Kenya. Washington, D.C. : International Monetary Fund, ©2019 9781498313957

Table of Contents:

International experience with interest rate controls
Interest rate controls in Kenya
The impact of interest rate controls in Kenya
Gauging the impact of the interest rate controls on growth.