Manufacturing companies have become the biggest bank loan defaulters that also contributed the most to last month's increase in the stock of non-performing loans (NPLs), Central Bank of Kenya (CBK) governor Patrick Njoroge has said.
The manufacturing sector's NPL's stood at Sh6.6 billion as at last month.
Dr Njoroge said the second biggest defaulters are firms operating in trade at Sh2.7 billion and real estate at Sh2 billion on the back of a difficult operating environment.
Personal and household loans also witnessed huge defaults amounting to Sh2 billion reflecting the difficulties borrowers are experiencing in servicing the loans.
"The ratio of gross Non Performing Loans to gross loans increased to 11.4 per cent in February 2018 from 10.6 per cent in December 2017 largely due to increased Non Performing Loans in the manufacturing sector and loan repayments in the transport and communications sector," he said at a Press conference on Tuesday following the Monetary Policy Committee's decision Monday that fixed the policy rate at 9.5 per cent, down from 10 per cent previously.
CBK data shows private sector credit grew 2.1 per cent in the 12 months to February this year, slightly lower than the 2.4 per cent in December last year.