Microfinance banks (MFBs) are charging small businesses up to 32 percent interest rates on loans despite insisting on collateral, with the Central Bank of Kenya (CBK) warning that such high rates will hurt growth.
CBK survey report on micro, small and medium enterprises (MSMEs) access to credit shows MSMEs raised the average interest rate charged to these businesses to 27 percent at the end of last year compared with 15.5 percent charged by commercial banks.
