A survey conducted by the Central Bank of Kenya showed that 87 percent of banks are optimistic about the country’s economic growth prospects.
Speaking during the post-Monetary Policy Committee (MPC) meeting media briefing, the CBK Governor Dr. Patrick Njoroge said that a Monetary Policy Committee market perception survey showed that 86% of non-bank financial institutions were optimistic about the growth.
The monetary policy committee had on Monday stated that the banking sector remains stable and resilient with average banks’ liquidity and capital adequacy ratios standing at 50.8 and 18.3 per cent respectively in August.
However, Dr. Njoroge noted that the high liquidity implied that banks need to move towards lending. Banks remain positive about the Big 4 agenda, as it will spur economic growth.
The ratio of gross non-performing loans (NPL) stood at 12.6 per cent in August compared to 12.7 per cent in June.
Furthermore, CBK notes that the private sector credit grew by 6.3 per cent in 12 months to August. Sectors such as trade (8.4%), manufacturing (7.5%), consumer durables (23.0%), private households (8.6%), and finance and insurance (6.3%).
Ongoing strengthening of credit information sharing mechanism is likely to support credit uptake with the reforms likely to promote transparency in pricing. CBK expects banks to provide innovative new credit products for MSMEs.
