Kenya | - Part 30

Banker-Bashing Is a Dangerous Thing. Just Look at Kenya

NAIROBI, Capital Markets in Africa: The frontier market of Kenya isn’t often on U.S. or European investors’ radar. It should be. It offers a timely reminder of financial markets’ complacency about the risk of populism; and the attractiveness of bashing banks to win votes. East Africa’s most advanced economy has introduced a law setting a cap on commercial lending rates and a floor on deposit payout rates, an instant squeeze on margins that sent shares of Kenyan…

Kenya Cuts Rates Weeks After Capping Cost of Commercial Credit

Posted on by The Editorial Team

NAIROBI, Capital Markets in Africa: The Central Bank of Kenya reduced its benchmark rate by 50 basis points to 10 percent, its second cut in four months, in a bid to boost private-sector credit amid government restrictions on loan costs. “The MPC noted the continued decline in growth of private sector credit, which has persisted since the last meeting, posing a risk to economic growth,” Governor Patrick Njoroge said in an e-mailed statement from the capital, Nairobi, Tuesday. Only…

Interest Rate Caps Boon for Big Kenyan Banks, Equity CEO Says

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NAIROBI, Capital Markets in Africa: A decision to cap Kenyan interest rates may favor the biggest banks as small lenders will struggle to raise cheap deposits to fund lending, according to Equity Group Holdings Ltd. Chief Executive Officer James Mwangi. At least 30 of Kenya’s 42 lenders may have difficulty paying the minimum for deposits as demanded by a new law on interest rates that came into effect on Sept. 14. The legislation limits borrowing costs…

Equity of Kenya Has 100 Billion Shillings to Help Double Loans

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NAIROBI, Capital Markets in Africa: Equity Group Holdings Ltd., Kenya’s biggest lender by market value, has as much as 100 billion shillings ($987.5 million) available for additional lending as it seeks to double business loans over the next three years, its directors said. With about 50 percent of the bank’s highest quality assets as a proportion of its cash outflows available, the lender has more than enough liquidity on hand for more loans, Chief Executive Officer James…

Kenyan Central Bank Sets CBR as the Base Rate for Loan Charges

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NAIROBI, Capital Market in Africa: Kenya’s central bank said lenders should peg their loans to its Central Bank Rate, or CBR, in line with a new law capping costs and as the International Monetary Fund warned that legislation limiting how much lenders charge for credit risks impeding access to loans. East Africa’s biggest economy has introduced restrictions on borrowing costs that set commercial rates at 400 basis points above a central bank base rate. Most…

Kenya Treasury Secretary to Meet Prospective Eurobond Buyers

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NAIROBI, Capital Market in Africa: Kenyan Treasury Secretary Henry Rotich said he’s likely to meet potential investors in the East African nation’s next Eurobond while visiting the U.S. next month. The government has also factored a possible U.S. Federal Reserve interest-rate hike later this year into its plans for selling more debt offshore, he said in an interview Tuesday in the capital, Nairobi. Rotich will be attending the International Monetary Fund annual meetings in Washington scheduled to take place…

Tight Security as East Africa Leaders Meet in Somali Capital

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SOMALI, Capital Markets in Africa: East African leaders met in Somalia’s capital for talks on issues including South Sudan’s crisis, a sign of improving security in the Horn of African country that’s trying to emerge from decades of civil war and hold elections next month. Kenyan President Uhuru Kenyatta and Ethiopian Prime Minister Hailemariam Desalegn were among those who arrived in Mogadishu on Tuesday, Somali Minister of Foreign Affairs Abdusalam Omer said on his Twitter account. The summit for the…

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