Many Kenyans are borrowing money to pay for basic things like food and rent, as they face financial difficulties. This has increased the risk of more people failing to repay their loans, which could reach up to Sh700 billion in total.
The Kenya Bankers Association (KBA) said that fewer people are taking loans to invest in their businesses or build new things. Instead, most of the loans are for short-term purposes, such as buying groceries or paying bills. This shows that the demand for loans is not driven by economic growth, but by survival needs.
The KBA chairperson, John Gachora, said that the banking industry is trying to help its customers by offering flexible repayment plans and restructuring their debts. However, he also urged the government to provide more support to the small and medium enterprises (SMEs) that are the backbone of the economy.
He said that the SMEs need more access to affordable credit, tax relief, and stimulus packages to recover from the impact of the pandemic and create more jobs and income. He also said that the government should improve the infrastructure and security in the country, to attract more investment and trade.
The KBA is an umbrella body that represents the interests of the banking sector in Kenya. It has 47 member banks, which account for over 90% of the banking assets in the country.
By Newsmedia