Kenya’s banking sector is tightening its grip on deposits, opting to hold onto its piles of cash rather than extend loans to small businesses, according to a recent survey by the Central Bank of Kenya (CBK).
This cautious stance is pushing many businesses to seek alternative funding sources outside traditional banking streams.
The survey, published yesterday by the banking regulator included responses from 38 commercial banks and 14 microfinance banks.
Its findings establish that executives expect a slowdown in credit growth through 2024.
High lending rates, a stronger shilling impacting foreign loans, and earlier CBK interventions are cited as key factors in this trend.
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