On Account of Asset Auctions, Bad Loans have their Largest Decline in 15 years.

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On account of more property auctions, the repayment of non-performing debt, and poor credit write-offs, the size of defaulted loans decreased in September by the greatest monthly margin in 15 years.

In the first half of the year, non-performing loans were mostly driven by the infrastructure, hotel, and manufacturing sectors, in part because of decreased demand for products and services after runaway inflation and delayed payments by the government.

High interest rates and increasing inflation have some positive and some negative effects on Kenyan banks. Higher lending rates and loan volumes will increase profitability on the one hand, but increasing credit risk will result in problem loans and loan loss provisions on the other “said Moody’s.

According to CBK statistics, delinquent loans increased from Sh351 billion in March 2020 when Kenya reported its first Covid-19 case.

BusinessDaily.

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