Interest Rate Ceiling is "the maximum interest rate that a financial institution can charge a borrower for an adjustable rate mortgage or loan according to the contractual terms of the mortgage or loan."
According to this research paper interest rate cap seems to generate more negative effects that positive ones:
Regarding the effects of these caps, the evidence points to more negative effects, such as a withdrawal of financial institutions from the poor or from specific segments of the market (as in WAEMU countries and Nicaragua), an increase in illegal lending (for example, in Japan and the United States), a decrease in the licensing of new lending institutions (as in Bolivia), an increase in the total cost of the loan through additional fees and commissions (as in Armenia, Nicaragua, and South Africa), and a decrease in product diversity (as in France and Germany).
Out of curiosity, I have checked the APR for loans provided by a company that also operates in my country and it is about 300% for a maximum amount over the maximum time span (maximum amount should minimize fixed commissions influence, the currency is a stable one).
APR computed by some site for a personal loan with the worst credit score is about 30%.
So, the difference is very large and it would make sense to have interest rates caps, to avoid such discrepancies.
However, the aforementioned paper concludes that these caps have more negative effects that positive ones:
Question: Why are there so many (at least 76 countries) countries that apply interest rate caps/ceilings?