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Browsing: 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.…
Kenya’s private sector and households are grappling with costly credit, a government report now indicates, curtailing key investments by firms and individuals despite a stable financial sector. One of the main criticisms of the credit market in Kenya is that the cost of credit and the interest rate spread by the banking sector is high.
On average, the annual interest rate for the Kenyan banking sector is within a range of 12 per cent to 14 per cent for various categories of loans offered, according to the Kenya Economic Report 2023 by the Kenya Institute for Public Policy Research and Analysis (KIPPRA).…
- Businesses in Kenya are facing the impact of tightened monetary policy that is resulting in high lending rates.
- The government is under increasing pressure from investors to settle huge pending bills.
- At the same time, the Kenya Shilling is steadily losing ground against major world currencies, piling pressure on external debt obligations.
In the second half of the year, business optimism for companies and sectoral growth prospects in Kenya appears to be subdued, largely influenced by the dual challenges of high taxes and a weakening Shilling.
The government's task of balancing rising debt levels with tax revenue generation is taking center stage in a scenario complicated by other economic factors.
A confluence of high-interest rates within the banking sector, a politically sensitive environment, the accumulation of pending bills that impact private sector cash flow, and the depreciation of the Kenyan Shilling is painting a complex business environment.
The Shilling has…
On 15 May, President William Ruto nominated Kamau Thugge as the new governor of the Central Bank of Kenya (CBK). If the Senate and the National Assembly ratify the appointment, Thugge will begin his first term as the CBK governor in mid-June. He will replace the incumbent Patrick Njoroge who assumed office as CBK governor in 2015.
The nomination of Thugge comes at a pivotal time for the Kenyan economy. Kenya’s inflation remains high at almost 8 per cent. The Kenyan shilling has also hit all-time lows against the US dollar. Thus, the monetary policies from the CBK will most likely come in handy in the coming months. But what makes Thugge the perfect fit for the crucial role of Kenya’s top banker?…
- The Monetary Policy Committee (MPC) on Wednesday noted the sustained inflationary pressures, the elevated global risks and their potential impact on the domestic economy.
- CBK sees a scope for a further tightening of the monetary policy in order to anchor inflation expectations.
- Overall inflation in Kenya increased to 9.2 percent in February 2023 from 9.0 percent in January, mainly driven by higher food prices.
The Central Bank of Kenya (CBK) has revised upwards the benchmark rate by 75.0 basis points to 9.50 per cent, in its latest move to try and tame the rising inflation in the country.
This is up from 8.75, signaling a higher cost of borrowing in the market.
Its decision making organ–the Monetary Policy Committee (MPC) on Wednesday noted the sustained inflationary pressures, the elevated global risks and their potential impact on the domestic economy, and concluded that there was scope for a further tightening of …
- Olugbenga Agboola, co-founder and CEO of Africa’s largest fintech company, Flutterwae fintech, purchased a Miami beach house valued at $7.1 million.
- Flutterwave’s raised $250 million in February 2022 at a valuation of $3 billion making it one of the few unicorns in Africa.
- The fintech has faced legal and regulatory hurdles in Kenya including the freezing of $40m held by Flutterwave on money laundering allegations.
Olugbenga Agboola, co-founder and CEO of Africa’s largest fintech company, Flutterwae fintech, purchased a Miami beach house valued at $7.1 million. This purchase raises various questions after the Nigerian fintech company was allegedly hacked resulting in a $4.2 million loss.
Business Insider Africa reported tha Agboola had purchased a six-bedroom, seven-bathroom house in Miami beach. According to official records, the property was previously owned by the Boschetii Group, a real estate development firm. They purchased the plots for $1.2 million in 2021 and built …
- The government of Tanzania has responded to claims that Kenyan companies are now obtaining dollars from Tanzania
- Kenya is currently experiencing a severe dollar shortage as a result of massive international debt repayments
- The Bank of Tanzania (BoT) is monitoring and evaluating the foreign exchange market to ensure compliance with all applicable laws and rules
The government of Tanzania has responded to claims that Kenyan companies are now obtaining dollars from Tanzania to fulfil their obligations to manufacturers and general goods importers.
Kenya is currently experiencing a severe dollar shortage as a result of massive international debt repayments, which caused its foreign exchange reserves to fall to a level that was below the key level of four months’ import coverage.
Lawrence Mafuru, the Deputy Permanent Secretary in the Ministry of Finance and Planning, stated in Dar es Salaam yesterday that the Foreign Exchange Act and rules govern the nation’s foreign …
The Central Bank of Kenya (CBK) has retained the base lending rate in the country at 8.75 per cent, citing easing inflationary pressure and positive macroeconomics outlook.
CBK’s decision making organ – Monetary Policy Committee (MPC) met on Monday against a backdrop of a weak global growth outlook, decline in global commodity prices, easing inflationary pressures, geopolitical tensions, persistent uncertainties, and measures taken by authorities around the world in response to these developments.
This includes the back-to-back fed rate hikes witnessed in the US as the country navigated high inflation which hit a peak last year.
Kenya’s overall inflation decreased to 9.1 per cent in December 2022 from 9.5 per cent in November, mainly due to lower food prices.
Food inflation declined to 13.8 per cent in December from 15.4 per cent in November, largely driven by a decrease in prices of maize and milk products.
This is pegged on …
The Kenyan economy’s leading indices of economic activity show ongoing solid growth in the second quarter of 2022, according to CBK, with strong activity in storage and transport, retail and wholesale trade, construction, information and communication, and lodging and food services.
“Despite decreased agricultural performance and sluggish global growth, the economy is anticipated to remain resilient throughout the balance of 2022,” CBK added.
Goods exports have been strong, increasing by 11.0 per cent in the year to August 2022 compared to the same time in 2021.…
According to Njoroge, it may be harder to borrow even as inflation increases due to advanced economies’ practices, such as rate hikes, which have shut us out of the financial system.
He mentioned that he had a discussion with Federal Reserve Chair Jerome Powell to urge the US Fed to give the impact of its policies on developing nations more consideration.
In order to ensure that emerging economies are not left on their own, he stated, “we need support from mature economies.”
Njoroge pointed out that despite this, emerging markets like Kenya have exhibited exceptional resilience in the face of global shocks, continuing to thrive.…