Kenya’s bank lending expanded at its fastest pace in a year in July, driven by a series of aggressive interest rate cuts by the central bank.
- Kenya’s bank lending experienced its fastest growth in a year as of July, driven by central bank interest rate cuts.
- Private-sector credit increased by 3.3%, reversing a previous contraction in January.
- KCB Group Plc held the largest loan book among lenders, while Diamond Trust Bank Group recorded the fastest growth.
- The Central Bank of Kenya has cumulatively reduced its benchmark rate by 3.5 percentage points since August 2024.
Kenya’s bank lending expanded at its fastest pace in a year in July, driven by a series of aggressive interest rate cuts by the central bank.
Private-sector credit rose 3.3%, Central Bank of Kenya Governor Kamau Thugge said in an interview with NTV Kenya. That marks a sharp reversal from a 3% contraction in January and is the strongest growth since July 2024, according to Bloomberg.
Among lenders, KCB Group Plc held the largest loan book in the first half of the year at 1.095 trillion shillings ($8.48 billion).
Diamond Trust Bank Group Plc reported the fastest credit growth, up 8% to 288.5 billion shillings, while NCBA Group Plc posted the steepest decline, down 7% to 288.1 billion shillings.
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Impact begins to take hold
The central bank has lowered its benchmark rate by a cumulative 3.5 percentage points since August 2024, including a 175-basis-point reduction last year. The impact of those cuts began to show between April and July, said Churchill Ogutu, an economist at IC Group.
“It’s starting to filter through the system,” he told Bloomberg. “In subsequent months we could see further uptick in the private-sector credit as it filters through completely, because it works with some long and variable lags.”
Still, the regulator had expected lending to rebound sooner. Earlier this year, it dispatched officials to banks to examine why commercial lending rates were not aligning with the benchmark cuts.
