Kenya to Address Credit Slowdown Caused by Caps, President Says
- Banks posting weaker profit as credit extension decelerates
- Private-sector loan growth slowed to 4.3% in December
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Kenyan President Uhuru Kenyatta said he’ll rectify a decline in bank lending to business caused by his decision in August to impose a limit on commercial lending rates.
Kenyatta in August capped rates at 4 percentage points above the central bank rate, fulfilling a campaign pledge he made before coming to power in 2013 to lower the cost of credit. The ceiling has failed to stimulate lending, with growth in loans to the private sector slowing to 4.3 percent in December, the weakest pace since at least 2005, from 18 percent a year earlier, according to central bank data.