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Why are loan defaults rising despite the availability of credit risk tools?
For policymakers, the study raises an important question: could some well-meaning policies, such as blanket debt relief, unintentionally encourage strategic default?
On June 10, 2025, the Monetary Policy Committee (MPC), through its chairman, Central Bank Governor Kamau Thugge, announced that the gross non-performing loans (NPLs) ratio in Kenya’s banking sector had climbed to 17.6 percent in April, up from 17.2 percent in February.
This upward trend in loan defaults, particularly in real estate, personal and household, trade, construction, and manufacturing sectors, has raised alarms across the financial ecosystem.
