NAIROBI, Kenya, Feb 24 – Kenyans will soon be better informed in their quest to access loans at the best interest rates available in the market.
Central Bank of Kenya (CBK) Director of Bank Supervision Rose Detho said on Tuesday that a study commissioned by them in conjunction with other players on the issue of full disclosures by banks, is complete.
Speaking during the mini-launch of a survey on bank charges and lending rates, Ms Detho said the findings and recommendations of the study would be made public by mid next month.
“One of the key issues that have arisen over the years on this survey has been the disclosure of fees other than interest rates on loans,” Ms Detho noted.
“In other countries, this has been addressed through the introduction of disclosure measures such as the Annual Percentage Rate (APR).”
APR incorporates other fees in disclosing the cost of credit over and above the interest rate.
“From this particular survey results, this would include, for example, legal fees, commitment fees and other fees other than interest rates,” she explained.
Ms Detho said the study, which was conducted by a South African consultancy firm, Genesis Analytics, will be implemented through a consultative approach.
“This study actually took lessons from other regimes, emerging markets and the developing world so come mid-next month they will share these recommendations with us,” she said.
“They have also gone around and reviewed our financial environment so that when we share their recommendations, we will see whether there are other disclosure requirements that we can incorporate in our APR.”
Ms Detho could not commit on an exact timeline when the regulations will be in place.
This year’s survey on bank charges and lending rates revealed that most banks’ cost of accessing loans and running current accounts generally went up.
“This does not mean all banks’ current accounts and loans went up but generally a majority,” Research Executive Research International Dixie Avugwi pointed out.
Interest rates for deposits went up on an average of 0.1 percent, with the highest bank offering a six percent interest rate compared to the lowest, at three percent.