Top banks cut provisions despite higher loan defaults

Loan default

The slowdown in private sector lending has equally impacted the dud loans as lower value disbursements fail to dilute existing defaults.

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Kenya’s largest banks reduced their allowance or buffers for expected credit losses, despite the level of loan defaults in the country hitting a near two-decade high of 16.3 percent as at June 2024.

The slowdown in provisions by most banks helped extend the industry’s profitability in the first six months of the year, by limiting the lender’s operating costs in the period.

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