List of cheapest and most expensive banks in Kenya

By Monica MUEMA

Data by the Central Bank of Kenya (CBK) shows 27 of the 39 commercial banks have raised their overall rates in the three months to March, with the latest review putting the lowest rate at nine percent for banks like the First Community Bank (FCB) and the highest at 17.6 percent for Credit Bank.

The highest rate was 14.6 percent (Sidian) in December last year, with Middle East Bank (16 percent) also ranking high in terms of highest rate.

FCB, a shariah-compliant lender that was in March cleared to sell 62.5 percent stake to Premier Bank Limited of Somalia, had a uniform rate of nine percent for personal, business and corporate loans.

Ecobank Kenya follows with an average rate of 10.7 percent while HF and Access Bank Kenya follow with 11 and 11.2 percent respectively.

Absa and the country’s most profitable lender, Equity Bank Kenya, are ranked sixth and seventh, with interest rates averaging 14.2 percent and 14.1 percent respectively.

The banks’ disclosures to the CBK do not, however, factor in costs such as negotiation fees, legal fees and insurance, which typically increase the effective cost of servicing loans.

Banks usually post a breakdown of other fees on a website that was developed by the Kenya Bankers Association (KBA) and the CBK to enhance transparency.

Interest rates are tipped to reset higher this year due to the increased adoption of risk-based pricing with more than 25 commercial banks having begun reviewing the cost of loans based on borrower risk profile.

KCB Group, whose approval is pending, disclosed during the release of first-quarter results that it had got CBK approval allowing KCB Kenya and National Bank of Kenya (NBK) to price loans depending on risk levels.

The CBK data shows KCB was by the end of March averaging Sh12.3 percent, making it the lender with the ninth friendliest price of loans alongside Standard Chartered Bank of Kenya which averages the same rate.