Credit growth at Kenya’s largest banks is set to expand at the fastest pace in six years as they shift cash parked in government securities to lending to the private sector. Lenders in East Africa’s biggest economy were stymied as regulatory decisions hampered their ability to price risk. The central bank is now expected to clear more risk-based pricing proposals by banks after two years of discussions, which should result in lower double-digit loan-book growth, according to Churchill Ogutu, an economist at IC Group. A law to cap lending rates, followed by two years of discussions on risk-pricing proposals, and the pandemic have seen banks move money to government securities. Kenya’s biggest bank by market value, Equity Group Holdings Plc has its biggest chunk of cash in government paper at $3.42 billion. Credit growth accelerated to 9.1% from 1.55% in June 2017, while bad loans were at 14% in February, according to central bank data.
SOURCE: BLOOMBERG