RELATIONSHIP BETWEEN INTEREST RATE CAPPING AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KAKAMEGA COUNTY, KENYA

Before interest rate capping, commercial banks fixed their basic rates and offered clients the highest muscle. Such higher payments undermined customers but allowed to continue benefit from huge profit margins. In contrast, introduction of capping how have been dissolved has resulted drop profitability . A case Kenya Commercial Bank Limited in Kakamega County was utilized evaluate relationship between performance Kenya. The study's objectives were to; identify credit uptake, financial exposure lending practices Kenyan banks. descriptive survey research design utilized. target population all staffs two KCB branches County; including branch managers, supervisors, other staffs. To sample 103 prime employees, stratified random sampling used. Questionnaires used gather primary data while secondary collected using schedule. results revealed that there is significant positive uptake (r=0.606, P=0.000). Further, negative (r=-0.282, P=0.011). Lastly, loaning (r=0.661, study concluded recommended management at should balance fees chargeable on each loan product as processing fee a percentage make loans affordable customers. Furthermore, face risky can be reduced by improving closer scrutiny weed out those likely default. customer’s needs considered when setting such levels so enhance its intermediation role. government, academics, general public, stakeholders banking business are expected knowledge this offer. Key Words; Interest Rate Capping, Financial Performance, Credit Uptake, Exposure, Lending Practices, Banks CITATION : Ocharo, R. K., & Sangoro, O. (2023). Relationship County, Strategic Journal Business Change Management, 10 (2), 1496 – 1507.