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How private sector, banks got wedged in credit tussles
CBK data shows while lending to the private sector has been largely stagnant, investment in government securities by banking institutions has been growing.
Private sector credit has stagnated in recent years owing to a high-interest regime, which has traditionally prompted financial institutions to invest money in government securities that are risk-free.
Kenya’s businesses and enterprises have largely struggled to access new loans from banks in a tough economic setting characterised by high default rates amid a reduction in disposable income for households and deepening cash flow woes for businesses.
