Firms to score savings on T-bill linked debt

Citibank Kenya Managing Director Martin Mugambi during a 2022 interview in Nairobi. 

Photo credit: File | Nation Media Group

Companies with loan facilities pegged on Treasury bill rates are set for significant savings in finance costs following the fall in the interest rates on the short-term securities in the last two months.

Banks often price short and medium-term loans to companies at the prevailing Treasury bill rate plus a premium. They do so to protect themselves from losing their margins when the cost of funds goes up as they compete with the Treasury for private sector deposits.

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