Kenya's bank rate cap pushed safe borrowers to banks, left risky ones for digital lenders

Kenya capped the interest rates banks could charge on loans, but left digital lenders exempt. This meant safer borrowers got cheaper bank loans, while riskier borrowers still found credit through digital platforms.

Governments often cap interest rates to protect borrowers, but this can cut off credit for people seen as risky. Kenya's experience shows that leaving digital lenders out of the cap kept credit flowing to those borrowers, even if it meant a slight overall economic cost.