- Kenyan banks raise interest rates to 16.45% despite shrinking private sector credit demand
- Non-performing loans hit a 16-year high, prompting concerns over profitability and risk management
Kenyan banks have hiked interest rates in the first half of the year to counter shrinking private sector credit demand, but the move has triggered a surge in loan defaults. Despite the Central Bank of Kenya (CBK) holding the benchmark rate at 13% for much of the year—only trimming it to 12.75% recently—lenders have pushed their base lending rates up by 125 basis points to 16.45%, according to the CBK’s most recent report.
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