The directive is in accordance with section 89(1) of the Tier 4 Microfinance Institutions and Money Lenders Act, which states that the maximum interest rate that a money lender shall charge on the principal or the actual sum of money advanced as a loan to a borrower is two point eight percent (2.8%) per month or thirty-three point six percent (33.6) per annum.

The directive aims to protect consumers from predatory lending practices and ensure that borrowing remains accessible and fair. By establishing a clear interest rate cap, the government seeks to foster a more equitable and fair financial environment for individuals seeking loans.