How banks are denying good clients cheaper loans

Commercial banks have been denying good borrowers cheaper credit through improper application of their risk-based pricing models and imposition of additional charges on loan facilities, the Central Bank of Kenya (CBK) has disclosed in a working paper ahead of an overhaul of the current loan pricing regime.

The CBK said inspections on banks revealed that some were not effecting their risk-based pricing models as agreed, putting them in breach of the Kenyan Banking Sector Charter and regulatory penalties.