Banks cut credit lines for struggling companies

Pradeep Paunrana, ARM chief executive, Atul Shah, Nakumatt Holdings managing director and Deacons chief executive officer Muchiri Wahome. FILE PHOTO | NMG

Kenyan banks are increasingly pulling the plug on financially distressed companies, forcing some of them into administration or taking shareholders' loans to stay afloat, the latest industry data shows.

The trend got traction especially after the capping of lending rates and the subsequent reluctance by banks to lend to firms with weak financial backbones that have traditionally relied on debt refinancing at high interest rates to remain afloat.

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