NAIROBI, Kenya, Oct 28 – The Kenya Bankers Association (KBA) says commercial banks remain adequately liquid to support private sector lending despite increasing investments in government securities.
KBA Tax Committee Chairperson Peter Mungai said lenders play a key role in financing the national budget and infrastructure projects without undermining their capacity to lend to businesses and households.
“Banks participate in the bond and government securities market just like any other investor, but never at the expense of funding available to our customers,” said Mungai.
He noted that attractive returns on government securities between 2023 and 2024 drew higher participation from banks, but the recent decline in interest rates is expected to spur renewed credit growth to the private sector.
Mungai attributed weak credit uptake mainly to low disposable incomes, saying the challenge lies in borrowers’ reduced ability to qualify for loans rather than liquidity constraints.
He called for broader economic interventions to boost household incomes and stimulate credit demand.
