T-Bill rates now around 9%. Interbank lending rates fell to 4%. But still the big boys are charging you high interest rates. Others even have the audacity to increase the rates.
Anyway, wewe shinda hapo bragging that you bank with a big bank yet their interest rates are just shafting you. Ni vizuri kutembea these small and mid tier banks ujue their loan rates. You will be amazed at how some are competitive. For instance, there was one small bank offering me 9% mor
Now the control C+V part
Commercial banks have defied calls by
the industry lobby and regulator to
lower interests on loans on the back of a
relatively favourable fiscal environment
marked by low Treasury Bill rates.
The Kenya Bankers Association (KBA)
has supported calls by Treasury and the
Central Bank of Kenya urging customers
to shun the banks charging high
interests.
“This is a very competitive market and
banks compete on factors including
price. Those banks that are slow to
respond to market movements risk
losing market share as their customers
will simply vote with their feet,” said
KBA chief executive Habil Olaka on
Monday.
Mr Olaka spoke as a section of customers
learnt with shock that many banks would
go ahead and effect earlier notices they
had served borrowers indicating that the
interest rates on their loans would be
pushed up by several percentage points
despite the lowering of Treasury Bills
rates.
In a notice to customers, which took
effect on Monday, Commercial Bank of
Africa (CBA), for instance, said it had
found it necessary to increase the
applicable interest margin by an
additional 2 per cent per annum.
“We, therefore, wish to advise you that
the new interest margin “K” applicable
to your Kenya Shilling credit facility will,
therefore, be increased from 18.74 per
cent to 20.74 per cent with effect from 7
December, 2015. The current Kenya
Bankers Reference Rate (KBRR) remains
unchanged,” said the lender.
It added: “We, however, note the recent
downward movement in Treasury Bills,
a KBRR component reference rate. We
expect that if this continues, the bank
will be able to similarly reflect this
reduction in its facility interest margins.
For scheme customers, the current
monthly instalment amount remains
unchanged. However, your loan tenor
may be varied.”
The interest rates for government
securities soared two months ago, with
the 91-day Treasury Bill peaking at 22.5
per cent yield on October 22.
The rates have since fallen, with the
three-month Treasury Bill selling at 9.2
per cent last week.
In a drastic call that hinted of heightened
frustration by CBK at failure by banks to
reciprocate the lowering of Treasury Bill
rates, the CBK governor, last week asked
borrowers to walk out of banks that have
refused to cut interest rates.
“Our view is still the same, commercial
banks need to lower their rates in a
proportionate way. This is where people
need to vote with their feet, I mean why
do you feel trapped? If you think it is a
high rate, why not move to another
bank?’’ Dr Patrick Njoroge posed.
