Lending to private sector hit eight-year low –CBK

By Phyllis MUCHOKI

Lending to the private sector by commercial banks grew by four percent in the year to June 2024 compared to 13.9 percent at the beginning of the year, the slowest pace in five years, hurt by the effect of a stronger shilling on foreign currency loans and reduced borrowing capacity by businesses and households due to higher interest rates.

This is according to data from the bank’s Monetary Policy Committee (MPC), which on Wednesday eased the base-lending rate by 25 basis points to 12.75 per cent, shows credit to the private sector grew by four percent, just slightly above 3.7 percent reported between September 2016 and November 2019.