Kenyan Banks Lending Rates Rise as at June 2016…

Recently Members of Parliament passed a bill of capping interest rate at 400 basis points above the Central Bank benchmark Rate. The bill was passed unanimously by parliament and currently awaiting to be signed by the President of the Republic of Kenya in order for the bill to come into law.

Well we will not engage in this hot debate that is bringing a sort of tension between Main Street and Wall Street fellows. We felt it best to publish the most recent lending rates to inform the general public where the current bank lending rates are in the most recent publication by the Central Bank of Kenya.

Related; ICPAK supports Regulation of Interest Rates, says banks can’t self regulate themselves

Overall Bank Lending rate stood at 18.20 percent in the second quarter compared to 17.90 percent in the first quarter of the year, an indicative increase by 30 basis points.

Below is a Table demonstrating each banks overall lending rate from Dec 2015 to June 2016;

Bps = Basis Points    100 Basis Points = 1%  Red = Increase   Green = Reduction

Bank Lending Rates          

From the data 15 banks increased their average lending rates from the previous quarter and 21 banks cut their overall lending rates, while 6 banks remained unchanged.

READ; What’s the best rate for a 30-Day loan in Kenya’s Digital Credit? KCB M-PESA,Equitel,M-SHWARI?

From the data we found very interesting findings, only three banks increased their overall lending rates by over 100 basis points i.e.

  1. Family Bank which increased with the highest margin from 15.20 percent in Q1 2016 to 20.00 percent in Q2 2016 a significant increase by 480 basis points.
  2. Guardian Bank increased its average lending rate by 170 basis points from an average of 14.70 percent to 16.40 percent.
  3. Kenya Commercial Bank increased its overall lending rates from 16.10 percent to 17.30 percent an increase of 120 basis points.

On the flip-side four banks cut their overall lending rates by over 100 basis points, these are:

  1. Jamii Bora Bank. It cut its overall lending rate by 140 basis points from 22.60 percent in Q1 2016 to 21.20 percent in Q2 2016.
  2. Giro Bank. It cut its overall lending rates by 120 basis points from 18.10 percent to 16.90 percent compared to the previous quarter.
  3. Citibank N.A cut its overall lending rates by 120 basis points from 12.90 percent in Q1 to 11.70 percent in Q2 2016.
  4. Fidelity Commercial Bank cut its overall lending rate by 110 basis points from 19.40 percent in Q1 2016 to 18.30 percent in Q2 2016.

Related; Central Bank says Bill to Regulate interest rates will have adverse consequences

Top 5 Kenyan Banks with the Most/Least Favorable Lending Rates as at June 2016

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  • First Community Bank does not give long term loans i.e. over 5 years.
  • Citibank N.A only has Corporate Clients hence lends to Corporates.
  • Habib Bank has favorable personal lending rates, however, they do not offer long term loans over 5 years.

READ; Central Bank Of Kenya Retains CBR at 10.5%, Lowers KBRR to 8.9%

The Central Bank of Kenya MPC met last week on July 25th and retained the benchmark interest rate at 10.5% as shown in the Table Below. The Committee also reviewed the Kenya Banks’ Reference Rate (KBRR) to 8.90% from 9.87%, effective from July 25.

Central Bank Of Kenya CBR
Central Bank Of Kenya CBR

Now you are in the know.

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Sources: (Central Bank of Kenya, Kenyan Wall Street)

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