Kenya’s biggest lender by assets KCB on Wednesday reported a five-fold increase in average monthly lending to individuals, signalling rising interest in borrowing since the coming into force of a new law capping of interest rates. The bank said it had lent out Sh6.3 billion in three weeks, disapproving earlier fears that the new loan prices would deter banks from lending to individuals, who are deemed to carry the highest risk in the lending market. KCB’s loan book grew by Sh27 billion to Sh347.3 billion between June 2015 and June 2016, averaging Sh2.25 billion in additional loans per month. The bank also reported that it had seen a surge in borrowing on its mobile phone platform KCB M-Pesa, where interest rates are also capped at an annual rate of 14 per cent. Although banks have increased lending to government as a result of the new law, interest rates on the risk free short term Treasuries have been coming down as CBK continues to reject high priced bids.

Source: Daily Nation September 28, 2016 18:56 UTC