Sunday, April 2, 2023

Banks go slow on lending as loan defaults rise

Kenyan banks have gone slow on offering credit as more borrowers default on their loan repayments.

According to data from Central Bank of Kenya (CBK) banks increased requests for credit information by over 100 per cent last year.

Bank credit report requests jumped from three million in 2015 to six million, a 107 per cent jump, while micro-finance banks doubled from 176,619 to 294,813.

However, bad loans hit Sh. 207 billion by the third quarter last year, the highest ever in the country’s financial history attributed to tighter loan classifications enforced by new CBK Governor Patrick Njoroge as well as company layoffs and business cash flow constraints.

Additionally, the CBK data shows that Kenyans also became more curious about their status last year with a total of 88,371 requesting their credit status, up from 44,023 in 2015.

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