In December, bank lending rates increased to their highest level in 52 months as a result of rate rises by Kenya’s Central Bank (CBK) and rising yields on government debt.
Since August 2018, when it stood at 12.78 percent, the average lending rate has increased to its current level, which might hinder business investment and make house loans and other loans unaffordable for many people. Currently, the benchmark rate is 8.75 percent.
According to CBK statistics, banks reported a 25.3 percent increase in profit before tax last year, going from Sh194.8 billion to Sh244.1 billion, and a 13.2 percent increase in gross loans, going from Sh3.677 trillion to Sh3.677 trillion. For the past ten years, Kenyan banks have reported increasing profitability, drawing in outside capital.
