The private sector credit growth rate is set to miss the Central Bank of Kenya (CBK) target despite a modest recovery in the past few months.
CBK governor Patrick Njoroge yesterday said even though there was a 4.4 per cent growth in the 12 months to October — compared to September’s 3.9 per cent — the expected gradual growth for the remainder of the year will not match CBK expectations.
The private sector credit growth rate is set to miss the Central Bank of Kenya (CBK) target despite a modest recovery in the past few months.
CBK governor Patrick Njoroge yesterday said even though there was a 4.4 per cent growth in the 12 months to October — compared to September’s 3.9 per cent — the expected gradual growth for the remainder of the year will not match CBK expectations.
“Our target for the year was seven or eight per cent in the 12 months to December. It looks like we will be below that,” said Dr Njoroge.
This is despite loans to manufacturing, finance and insurance consumer durables growing at 14.9 per cent, 9.1 per cent, and 12.4 per cent respectively, which is above the CBK’s overall target for the year. Loan expansion has been sluggish since the 2016 rate caps.
At least six sectors including trade, building and construction, real estate and consumer durables are in single-digit percentage growth. Dr Njoroge said he expects banks to strike a delicate balance between stepping up efforts for loan recoveries and opening credit tabs to the economy.
In October, the non-performing loans (NPLs) ratio fell to 12.3 per cent from 12.7 per cent largely due to a decline in NPLs in trade, personal and household sectors but the governor said delays in payment remains a concern to banks.
“There is a concern to the economy that suppliers are not being paid on time. The delay has grown from three to six and even nine months... The more the banks work to recover it (loans), the better for the economy,” said the governor.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
