NCBA Group will this month increase lending rates in the wake of a rise in the benchmark lending rate by banking regulators in Kenya and the US.
The bank notified customers that it will hike lending rates for the dollar and shilling-denominated loans to 12 percent and 10.5 percent respectively from May 29.
The Central Bank of Kenya (CBK) hiked the benchmark lending rate to 9.5 percent in March while the US Federal Reserve increased the rate to a range of 4.5 percent and five percent, in efforts to curb inflation.
NCBA joins a number of other tier-one banks that have hiked lending rates amid the increase in CBK’s benchmark lending rates and implementation of risk-based pricing following the removal of interest rate caps.
“In view of recent increases in the Kenya Central Bank rate and the US Federal Funds rate, we wish to advise that we will be increasing our base lending rates to 12 percent for Ksh-denominated loan facilities and to 10.5 percent for USD-denominated facilities effective May 29th, 2023,” the bank said in a notice to customers.
Equity Bank Kenya, Absa and Stanbic Bank are the other tier-one banks that have been allowed to increase lending rates by the CBK in line with risk-based lending.
NCBA’s loan book in the Kenyan market stood at 249.8 billion in the financial year ended December, representing a rise of 13.5 percent from Sh220.01 billion the year before.