Thursday, November 21, 2024

Top 10 Most Expensive Banks in Kenya

Top 10 Most Expensive Banks in Kenya

The Central Bank of Kenya (CBK) recently revealed the banks in Kenya with the most expensive and cheapest loans.

CBK data on the average lending rates commercial banks offer show 27 of the 39 commercial banks have raised their overall rates in the three months to March 2023.

Credit Bank, which has an average interest rate of 17.6 percent, tops as the most expensive bank in Kenya, followed by Middle East Bank, which lends at 16 percent. Sidian follows closely at 14.9 percent to close the top three list.

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Here is the list of the top 10 banks with the most expensive loans

  1. Credit Bank – 17.6%
  2. Middle East – 16%
  3. Sidian Bank – 14.9%
  4. CIB – 14.7%
  5. Victoria – 14.5%
  6. Absa – 14.2%
  7. Equity – 14.1%
  8. M-Oriental – 14%
  9. Kingdom – 13.8%
  10. SBM Bank – 13.7%

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On the cheapest banks list, First Community Bank topped the list with an interest rate of 9 percent, followed by Ecobank and HFC at 10.7 and 11 percent, respectively.

Banks have been revising their interest rates upwards following CBK’s move to increase its base rate.

CBK’s Monetary Policy Committee (MPC) —the highest decision-making organ— at the end of March 2023, raised its benchmark lending rate to a five-year high of 9.5 percent from 8.75 percent.

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The move by the apex bank was geared towards fighting the prevailing increase in prices of goods and services.

The regulator also named the elevated global risks and their impact on the domestic economy as some of the key drivers for the tightening of the monetary policy.

The Central Bank Rate(CBR) is the rate at which banks borrow from the CBK before on-lending to consumers.

When the CBR goes up, the interest rates of loans offered by banks also increase, as banks use the base rate to calculate how much they charge a particular customer.

In its latest meeting held on May 29, CBK left the base rate unchanged on the back of declining inflation and tightening of monetary policy.

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