Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Kenyan banks get thumbs up over rates

NAIROBI, Kenya Apr 16 – The government has lauded the decision taken by banks to lower their base lending rates.

Trade Minister Amos Kimunya said on Friday that the move was encouraging for borrowers who have for long complained of high interest charges that have constrained opportunities to expand business in the country.

Mr Kimunya said this would go a long way in making the country an attractive investment destination leading to overall growth of the economy.

“This is indeed laudable and is sending the right signals to the banking sector and this should be emulated by other banks as this is in tandem with improving the economic conditions in the country,” Mr Kimunya said at an event to flag off 300 Barclayclub members who were heading to the Maasai Mara.

Barclay Bank of Kenya and Co-operative bank have lowered their base lending rates by two and one percent respectively.

In the last twelve months, the Central Bank’s Monetary Policy Committee (MPC) has also slashed the Central Bank Rate (CBR) to 6.75 percent.

The first bank to respond was Barclays Bank of Kenya, which cut its lending rates from 15.75 percent to 13.75. Co-operative Bank followed slashing its base lending rate by one percent from 15 percent to 14 percent.

Mr Kimunya said it was time more banks took up the challenge in efforts to make credit more affordable.

Economic analysts have predicted that lower rates would translate to more uptake of credit, which would stimulate economic activity.

Banks have however been slow to respond arguing that the structural rigidities in credit supply inhibit lowering of rates adding it could be solved by offering more long-term loans.

Advertisement. Scroll to continue reading.

The Trade Minister said the next challenge for boosting business will be to address other bottlenecks that make the cost of doing business remain high and avoid losing out to competition from the wider East African community.

“Now that interest rates are falling, I am hoping soon that other issues will be addressed to bring the overall cost of production down and make our goods more competitive,” he said.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...