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Kenyans could soon start paying high-interest rates to access credit from commercial banks.
This revelation came after commercial banks started to implement the Central Bank of Kenya's (CBK) new benchmark rate.
In September 2022, CBK raised the base lending rate from 7.5% to 8.25%, the first benchmark under President William Ruto's watch.
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This was due to the rising inflation, which hit a record 9.2% in September, up from 8.3% recorded in August 2022.
According to Business Daily, commercial lenders, including Standard Chartered, Housing Finance, Stanbic Bank, and NCBA Group, have informed their customers of the changes in loan costs.
NCBA bank browsers will pay loan interest by more than 1.1%, from 8.9% to 10%, starting November 2022.
Standard Chartered bank raised its rate from 8.5% to 9.25%, while Stanbic Bank's rate grew to 9.55% from 8.80%, effective November.
The lenders warned existing loan browsers that the adjustment will affect current loan facilities under service.
In May 2022, the regulator raised the lending rate to 7.5% for the first time in seven years.
This followed changes in the global outlook, with elevated global inflationary pressures and heightened geopolitical tensions.
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President Ruto said his government will work closely with financial lenders to improve loan access and affordability.
Ruto said he will collaborate with credit providers to develop a loan product that will enable mama mbogas to access credit at a single-digit interest.
The head of state challenged Safaricom, KCB and NCBA to come up with a long-term solution loan product, saying Fuliza is short-term.
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Source: TUKO.co.ke
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