KCB has been the most recent bank to increase its rates from 15 percent to 19 percent. This is the second increment by KCB after a July raise to 15 percent from 13.5 per cent. This now makes KCB the most expensive lender among Kenya’s top five banks that have published interest rate increases. Other small and medium lenders have also increased their rates after the Central Bank of Kenya jerked up its policy rate by four percentage points to 11 per cent. This reads a gloomy financial climate for businesses in Kenya.
Co-operative, Standard Chartered and Barclays which together with KCB and Equity make up Kenya’s top five lenders by assets and profitability have announced increases of their base rates in the past one month. The new rates are as follows:
Standard Chartered, which recently increased its base lending charges, is now at 16.5%. Barclays Bank is the cheapest among the group with a rate of 14.75% while Equity Bank is priced at 15% and Co-operative Bank at 16%.
This is bad news for the economy as it makes borrowing expensive. People will now think twice before borrowing as the bank lending rates in Kenya have shot up and this means that any investment made will need to assure higher returns.
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