Central Bank of Kenya expects a year-on-year growth in credit uptake
The banking industry regulator expects growth in loans to the private sector to start edging up next month. April is the deadline for commercial banks to present their revised business models for sustainable growth.
Central Bank of Kenya governor Patrick Njoroge said yesterday he expect year-on-year growth in credit uptake by the private sector to be at about 5.5 per cent from next month, rising to about 10 per cent by year-end.
Growth in private sector credit has stabilised at about 4.5 per cent since December 2016 after a steady slowdown from about 17 per cent in December 2015, largely on rising default levels.
The banks will have to satisfy the regulator that their revised business models will withstand increased competition amid tight regulations.
“All banks are supposed to get back to us by end of April with their revised business plans .There is a lot of dynamism. They (banks) cannot remain in business as usual (mode), they should look at what their comparative advantage is and what their niche is,” Njoroge told a press conference in Nairobi. “They need to have much more sustainable models that they does not involve charging everybody an arm and a leg.”
The CBK’s Monetary Policy Committee on Monday said that while the growth in private sector credit has stabilised at 4.5 per cent, the share of loans to corporates has increased relative to business and personal loans.
Read more: http://www.the-star.co.ke/news/2017/03/29/cbk-sees-credit-to-firms-rise-from-april_c1533551