Cabinet Approves Loan Interest Ceiling Restriction Proposal
The Cabinet has signed off on a draft law that sets a ceiling for the annual percentage rate on consumer loans.
Part of a package of legislation to address tactics from the instant loan subsector - sometimes seen as predatory. The law says that a loan agreement is null and void if the cost of the credit comes to more than three times the six-month average annual interest rate on consumer loans, as posted by the central bank.
As of this August, that triple rate is 102.17 percent.
Agreements would be automatically considered void if the rate is higher, and the consumer pays only the principal back by the original loan payment date.