Data published by the Central Bank of Kenya (CBK) revealed total claims on the private sector to commercial banks had increased to Sh3.26 trillion in March 2022 pushing the private sector credit growth to a five-year high of 10.8 per cent. compared to the Sh2.94 trillion that was outstanding at the end of March last year.
Credit uptake has been on an upward trajectory for eight consecutive months, rising from a 27-month low of 5.8 per cent last July when Kenya was still in the wake of the covid-19 pandemic.
“Loan applications and approvals have been strong reflecting improved demand with increased economic activities,” said the CBK in its monetary policy statement in March.
The CBK monthly economic indicators revealed that the transport and communications sector was the biggest recipient of new credit from banks growing at 24.1 per cent in February and 20.7 per cent in January.
The sector had previously reported the second biggest growth in bad loans last year behind real estate, growing by 10.8 per cent (Sh4 billion) to close the year at Sh42.2 billion.
Other sectors that were big recipients of fresh credit were trade (8.9 per cent) and consumer durables (14 per cent) and business services at 11.6 per cent.
CBK expressed optimism in the continued recovery of the economy despite the ongoing Russia-Ukraine conflict that has led to commodity supply disruptions.
“The economy is expected to remain resilient supported by recovery in agriculture and continued strong performance of service sector despite the downside risks to global growth in 2022,” said the CBK.
Read also; Kenya’s Private Sector Activity Drops to Lowest Level in 11 Months.