Central Bank Publishes Overall Weighted Lending Rates for Kenyan Banks

By Soko Directory Team / Published February 15, 2016 | 6:31 am



central-bank-rate

The Central Bank of Kenya has set the credit pricing by the banks of Kenya publishing average lending rates for all commercial banks in Kenya.

The decision by the Central Bank of Kenya comes as allegations emerged early last year of lack of transparency in the banking system where lenders exposed borrowers to high lending interest rates with no proper regulation for them.

In order to promote transparency in the pricing of credit by commercial banks, the Central Bank of Kenya has decided to publish the average lending rates for various loan products by banks as well as the overall average weighted lending rates by the commercial banks.

These are some of the terms that have been used in the publishing of the new lending rates for commercial banks;

  • Corporate Lending- this refers to loans that are advanced by commercial banks to generally larger companies.
  • Business Lending- this refers to loans that are advanced by commercial banks to customers especially for supporting business endeavors.
  • Personal Lending- this refers to consumer loans granted by commercial banks to individuals for personal or household use.

Generally, loans advanced by commercial banks in each business segment are grouped into three maturity profiles as shown below;

  • Overdrafts- these are loans whose maturity is less than one year or overdrawn balances in customers’ current accounts.
  • Loans whose maturity is between one to five years.
  • Loans whose maturity is over five years.

The published lending rates for ach commercial bank are weighted average lending rate per loan category e.g corporate, business as well as personal, and maturity, that is to say overdraft, one to five years and over five years.

The weighting of the rates is based on the loan volume for each borrower under each loan category as well as maturity. The overall rate for each loan category and maturity is the sum, of the weighted rates across all borrowers.

The overall average weighted lending rate for each commercial bank is the weighted average rate across all loan categories that is corporate, business and personal, and the maturities, that is overdraft, one to five years and over five years and the weighting is based on each volume for each loan category or maturity.

The published interest rates by the Central Bank of Kenya are the average weighted lending rates for each type of loan product and the overall average weighted lending rates for each bank as at the end of a specified period. As a result, the actual rates charged by banks may be higher or lower than the published average rates. The actual rates are based on negotiations between the bank and the borrowing customer.

The following table shows the overall weighted lending rates in percentage (%) for 22 banks. All the commercial banks have been weighted but we just selected 22 as a sample.

NAME OF BANKJUNE-15SEPTEMBER-15DECEMBER-15
African Banking Corporation Ltd17.517.016.3
Bank of Africa Ltd13.818.020.5
Bank of Baroda15.516.317.6
Bank of India16.617.117.3
Backlays Bank of Kenya Ltd20.119.318.5
CFC Stanbic Bank Ltd14.015.517.8
Chase Bank of Kenya Ltd19.920.420.9
Citibank N.A11.912.315.5
Co-operative Bank of Kenya Ltd16.316.817.5
Commercial Bank of Africa Ltd16.717.519.6
Consolidated Bank Ltd16.620.420.5
Credit Bank Ltd17.618.622.5
Development Bank of Kenya 15.416.218.8
Diamond Trust Bank Ltd15.215.518.3
Dubai Bank Ltd18.8
Ecobank of Kenya Ltd18.518.217.3
Equatorial Commercial Bank Ltd16.419.219.9
Equity Bank Ltd16.017.919.0
Family Bank Ltd14.216.915.5
Fidelity Commercial Bank Ltd15.816.519.9
First Community Bank Ltd10.510.516.4
Giro Commercial Bank15.416.418.8

Article by Juma Fred.




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2024
  • January 2024 (238)
  • February 2024 (227)
  • March 2024 (190)
  • April 2024 (133)
  • May 2024 (157)
  • June 2024 (145)
  • July 2024 (91)
  • 2023
  • January 2023 (182)
  • February 2023 (203)
  • March 2023 (322)
  • April 2023 (298)
  • May 2023 (268)
  • June 2023 (214)
  • July 2023 (212)
  • August 2023 (257)
  • September 2023 (237)
  • October 2023 (264)
  • November 2023 (286)
  • December 2023 (177)
  • 2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (358)
  • April 2022 (292)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (253)
  • September 2022 (246)
  • October 2022 (196)
  • November 2022 (232)
  • December 2022 (167)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (272)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950