Kenya: Pain for Borrowers as Banks Raise Cost of Getting Loans

3 April 2023
Capital FM (Nairobi)
By Kevin Rotich

Nairobi — Borrowers are set to pay more after the Central Bank of Kenya (CBK) increased its base lending rate.

This comes after CBK's Monetary Policy Committee (MPC) increased the Central Bank Rate (CBR) from 8.75 percent to 9.50 percent.

The rise means that borrowers will pay more in terms of interest on loans moving forward, making credits more expensive in the long run.

The impact of this will be felt by businesses that rely on loans to fund their operations.

One of the financial lenders that has increased its lending rate is the Kenya Commercial Bank (KCB).

For instance, the KCB M-Pesa Loan has increased to 8.85 percent from 8.79 percent.

"Dear customer, following the review of the Central Bank Rate (CBR) by CBK from 8.75% to 9.50%, effective 01/04/23 KCB M-PESA Loan will be charged a fee of 8.85% from 8.79%," KCB said in a message sent to a customer.

Only last year, CBK raised the base lending rate to 8.75 percent from 8.25 percent to tame runaway inflation in the economy amid elevated global risks.

The increase of 50 basis points signals a higher cost of loans for Kenyan borrowers, who are currently grappling with a high cost of living.

Read the original article on Capital FM.

Tagged:
Copyright © 2023 Capital FM. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 400 reports a day from more than 100 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.