Global credit rating firm Moody’s has projected a higher loan default rate of 14 per cent with a more significant risk expected in 2021. The loan default rate at Kenyan banks rose steadily between September 2015 to June 2018, and have hovered between 12-13 per cent of gross loans for the following two years. It adds that although Kenyan banks’ loan books are diversified in terms of economic sectors and borrowers, small businesses, to which banks are heavily exposed. Kenyan banks also hold high concentrations of loans to the confidence-sensitive real-estate sector - around 15 per cent of lending as of June 2019. Muted loan growth and authorities’ liquidity support will alleviate funding pressures.

Source: The Star September 18, 2020 00:56 UTC