Bowing to Pressure

Hello 👋🏿 It's Brian…

In today's edition of ‘The Daily Brief’, two giant commercial banks in Kenya have followed the CBK directive to cut interest rates.

Again…here is why small lenders not licensed by the CBK may have trouble filing lawsuits in the courts of law. Also, we look at why the government intends to toll more roads…

These…and more stories…

BANKING  

Bowing to Pressure : KCB, Co-op Bank cut interest rates

Two major commercial banks moved to lower their base lending rates, following the Central Bank of Kenya’s decision to cut the benchmark rate to 10.75% on Wednesday last week. Co-op bank cut its base lending to 14.5% from 16.5% – the first significant reduction since the CBK began its easing policy- while KCB bank reduced its base lending rate to 14.6% from 15.6%. Last week, the CBK said it will conduct on-site inspections of banks to ascertain that they are reducing their interest rates. Although the initiative sounded a little forceful than expected, the CBK was frustrated that after it began cutting rates last year, many commercial banks hesitated doing so, keeping loans expensive.

More details in this article 

Today's Poll

Yesterday's Poll Results

Do you think the NSE has what it takes to revitalize Kenya's capital markets? 

🟩🟩🟩🟩🟩🟩 Yes (54.55%)

🟨🟨🟨🟨⬜️⬜️ No (45.45%)

“Leave my court until you're licensed!”

The Small Claims Court is pushing non-deposit taking lenders to get licensed by the Central Bank of Kenya (CBK), as prescribed by law, if they want to continue filing claims in the court. The magistrate who made this decision claimed that many small lenders were abusing the court process by hastily filing a myriad suits without pursuing the cases. To prevent this practice, the court declared that it would not hear cases involving unregistered lenders, and made an example by throwing out 139 cases from these firms.

Here is how this is going to affect small-scale lending…

Also on Banking

INFRASTRUCTURE 

Coming Soon! More Toll Roads

Government officials are scratching their heads, wondering how they are going to garner more money from motorists via toll roads. This is not a new idea but the state has been pondering how to approach the toll plans carefully without rousing anger. Kenya’s current road network needs about KSh 253.5 billion annually to maintain but the Road Maintenance Levy Fund (RMLF) - the one collected each time you buy fuel - could only scoop KSh100 billion in 2024/2025. With a maintenance backlog of KShs 500 billion, the government knows it has to toll roads to meet the threshold but this could be the straw that broke the camel's back.

Fred Obura explores some of these plans government has to pacify discontent with the tolling plans.

FINTECHS

ANALYSIS 

Video of the Day 

Have a lovely evening