Smaller banks are charging higher interest rates on loans to offset the premium they pay to attract deposits, highlighting a funding disadvantage that is increasing borrowing costs for their customers.
Central Bank of Kenya (CBK) data for August shows several small lenders, including Credit Bank and Bank of Africa Kenya, charging loan rates above 17 percent compared with an industry average of 14.34 percent. They were also offering deposit rates of between eight and 11 percent to attract funds.
