Secured interbank lending doubles to Sh69.6bn

Banks offer liquidity support to each other through the interbank or overnight market, which unlike the horizontal repos does not require collateral.

Photo credit: Shutterstock

Commercial banks have more than doubled the volume of collateralised lending to each other in the first four months of the year, compared to the corresponding period in 2024, indicating skewed liquidity distribution in the sector.

This form of interbank lending known as horizontal repurchase agreement (repo), involves a bank borrowing from a peer on a short-term basis using its bond holdings as collateral.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.