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Banks cautious on loans repricing in New Year as high rates fuel defaults
From left: Co-op Bank CEO Gideon Muriuki, Treasury CS Njuguna Ndung’u and CBK Governor Kamau Thugge on the side-lines of an event in September. PHOTO | POOL
Commercial banks face tough decisions this New Year to balance between passing the increased cost of funds to customers or keeping lending rates relatively unchanged to avoid triggering more defaults.
In 2023 the market witnessed three increases in interest rates induced by the Central Bank of Kenya (CBK), with the last one coming on December 5, giving borrowers and lenders something new to think about given the rate of loan defaults that had by October hit levels last seen 16 years ago.
