Saturday, December 9

Banking

loans central bank of Kenya lending rates
  • The Central Bank of Kenya benchmark rate has gone up to 12.5 per cent from 10.5 per cent.
  • Developing economies including Kenya are paying dearly for geopolitical tensions.
  • The current US policy rate at 5.25 per cent -5.5 per cent is the highest in 22 years, exerting pressure on economies.

Borrowers in Kenya are facing the prospect of more expensive loans following the country’s central bank’s decision to raise its base lending rate to a near 11-year high of 12.50 per cent. This marks an increase from the 10.50 per cent rate that has been in place since June this year, when it rose from 9.50 per cent due to a rise in non-performing loans in the banking sector.

The hike in rates occurs as Kenya, along with other economies in the region, continues to grapple with the impact of global factors, including elevated interest rates in the United States. …

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UAE Banks Federation
  • The UAE Banks Federation (UBF) has committed to mobilize $270 billion in sustainable finance by 2030.
  • His Excellency Abdulaziz Al-Ghurair, Chairman of the UAE Banks Federation, announced the pledge at an event jointly organized by the Central Bank of the UAE and the COP28 Presidency, aiming to support and facilitate global climate finance solutions and progress towards a sustainable future.
  • UBF has been working closely with its partners on sustainability efforts to accelerate and advance sustainable development goals.

The UAE Banks Federation (UBF), the sole representative and unified voice of banks in the UAE, has committed to mobilize $270 billion in sustainable finance by the year 2030. His Excellency Abdulaziz Al-Ghurair, Chairman of UBF, announced the pledge at an event jointly organized by the Central Bank of the UAE and the COP28 Presidency, aimed at supporting and facilitating global climate finance solutions and progress towards a sustainable future.

“The pledge …

acquisitions Zimbabwe's banking sector
  • CBZ Holdings, FBC Holdings, and ZB Financial Holdings have all played a pivotal role in shaping Zimbabwe’s banking sector this year.
  • One of the most notable transactions in 2023 involves CBZ’s acquisition of a 36.35 per cent stake in First Mutual Holdings Limited.
  • 2023 saw FBC Holdings execute a strategic move by acquiring Standard Chartered Bank Zimbabwe Limited. 

This year has proven to be a transformative period for Zimbabwe’s banking sector, witnessing significant acquisitions that have reshaped the landscape. In particular, three major players, CBZ Holdings Limited (CBZ), FBC Holdings Limited (FBC), and ZB Financial Holdings (ZB), have played a pivotal role in these developments.

These acquisitions signify a dynamic shift in Zimbabwe’s banking sector, with key players strategically positioning themselves for growth and market dominance.

Acquisitions shaping Zimbabwe’s banking sector

One of the most notable transactions in 2023 involves CBZ’s acquisition of a 36.35 per cent stake in First…

Personal Loans for Kenyan consumers
  • TransUnion survey shows four in 10 (41%) of Kenyan consumers reported a decrease in income over the past three months.
  • A similar number or 42% of Kenyan consumers anticipate being unable to pay their current bills and loans in full.
  • About 55% of Kenyan consumers plan to make further cuts to their discretionary spending. What’s more, 47% expect a decrease in large purchases such as cars.

A new survey by TransUnion has revealed a mixed financial outlook for Kenyan consumers in the second quarter of 2023. The research, presented at its annual Financial Services summit in Nairobi, found that while eight in 10 (79 per cent) expect their household incomes to increase in the coming year, four in 10 (41 per cent) reported a decrease in income over the past three months. A similar number or 42 per cent anticipate being unable to pay their current bills and loans in …

AFAWA finance
  • The AfDB and the African Guarantee Fund have unveiled a fresh plan to enhance the financial inclusion of women in Nigeria’s economy.
  • The duo have opened the AFAWA Finance Series Nigeria, part of the AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) initiative.
  • AFAWA Finance Series Nigeria will explore ways of enhancing the regulatory frameworks that can boost access to finance for women entrepreneurs.

Africa has the highest number of female entrepreneurs across the globe. However, the biggest obstacle they encounter is limited access to finance. Although access to financing poses a challenge to all small and medium enterprises, women-owned businesses are notably at a disadvantage.

It is estimated that the financial gap facing women entrepreneurs may reach up to $50 billion. This can be attributed to several factors, including deep-rooted social and cultural norms. These norms have historically restricted women’s ownership rights of assets that could serve as

Climate finance by Multilateral Development Banks

Climate finance by Multilateral Development Banks (MDBs) for low-income and middle-income economies hit a new record of $60.7 billion in 2022. The amount was 46 per cent higher than the 2019 levels, a new joint report by the lenders shows.

In terms of usage, $38.0 billion, or 63 per cent, went into projects helping mitigate the rising threat of climate change. Another $22.7 billion, or 37 per cent, went into supporting climate change adaptation initiatives. Overall, the portfolio of private finance mobilised in the period stood at $16.9 billion, the report said.…

IMF-AfDB

The International Monetary Fund (IMF) has thrown its weight behind a call by the African Development Bank (AfDB) Group urging African nations to stop borrowing loans primarily secured by their natural resources.

IMF Managing Director Kristalina Georgieva met with Dr. Akinwumi Adesina, the President of the AfDB Group, in Abidjan, Cote D’Ivoire. This meeting marked the first time an IMF head visited the Bank headquarters since its establishment in 1964.…

Central Bank Of Kenya

The loan market in Kenya’s banking sector is going through one of its toughest periods in nearly two decades. With interest rates on the rise and a challenging economic environment, many borrowers—individuals and businesses—are finding it hard to meet their loan obligations.

According to the most recent data from the Central Bank of Kenya (CBK), the proportion of loans that are not being repaid, known as non-performing loans (NPLs), reached 15.0 percent in August 2023, up from 14.2 percent in August 2022. This represents more than $4 billion (Ksh596 billion), the highest it has been in 18 years. The last time Kenya experienced such a high level of loan defaults was back in 2005, when it reached nearly 30 percent.…

Islamic Finance taking shape in Africa
  • Uganda has issued first Islamic Banking License after a 20-year wait. On its part, Kenya has issued the first Islamic Bond to finance affordable housing agenda.
  • The performance of Sukuk bonds in the continent is revealing untapped demand that could finance development projects.
  • Estimates show global Islamic finance assets could reach $3.8 trillion by 2024.

Islamic Finance is on an exponential growth trajectory across Africa, garnering momentum by the day broadening the continent’s financial landscape. African countries are making significant steps towards bolstering access to shariah-compliant financial instruments and services, to cater to the largely financially, excluded Muslim population. This comes as figures from the Islamic Development Finance Corporation (IDFC), forecast that global Islamic Finance assets could reach $3.8 trillion by 2024.

Large swathes of African populace still remains unbanked, pertinently those shifting stance from the conventional system driven by their religious beliefs, thereby unlocking an untapped pool of investments.…