During his December 2004 Christmas holiday, President Kibaki gave his assent to the few Bills that Parliament had passed during the year, with two notable exemptions – the Banking Bill and the Health Insurance Bill.
Now populist MP’s eager to show that they represent poor Kenyans are clamoring for a fight to see that these two bills are passed.
The president objected to the National Social Health Insurance Bill 2004, because of the monstrous cost of the plan. He indicated that it should be implemented in financially feasible phases. MP’s are arguing that the rich (excluding themselves) should pay for the health care of the poor through taxes under the new scheme.
And his objection to the Banking (Amendment) Bill 2004, is because it contains a controversial clause known as the “in duplum rule” – which basically caps the amount that someone has to repay on a loan they default. I.e. if you take a loan of 1 million shillings and default on it, a Bank can only charge interest and penalties up to 1 million shillings – capping the amount you may be asked to repay at 2 million shillings. MP’s insist that the clause will stop poor Kenyans from being ripped off by foreign Banks.
Under the current law, there are people who defaulted on 1 million shilling loans, and have paid several million in penalties, and still owe more million in penalties to the Bank. Donors and the major Banks and donor organizations have objected to the clause, insisting that a free market can set its own rates.