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NAIROBI, Kenya, Jul. 5 – The Capping interest rates introduced in 2016 limiting borrowing rates to 4% above the rate the central bank was supposed to inject a new wave of capital through affordable loans.
But a new report shows that access to finance was the biggest hurdle for SMEs in 2017.
The Wyled International report says that about 68% of Kenya's SMEs do not have access to finance. have no access to finance because of the cap on interest rates.
Victor Otieno, director of research and innovation, says that only 32% of SMEs in 2017 The cap on interest rates was the second biggest problem that SMEs were facing in 2017 after a long election period that saw about 55% of SMEs reduce their earnings.
Only 14% of At the same time, Kenyan banks have turned to external financing to try to address the badet-liability mismatch.
In April, banks received about 36 billion shillings from international institutions. time lag between issued loans that tend to be relatively long-term and deposits that tend to be short-term.
KCB received 10.1 billion Sh from African Development Bank credit which should be used to facilitate the Small and Medium Enterprises (MSMEs) as well as providing funding to deserving commercial entities in the agricultural value chain.
Stanbic Bank Kenya also raised a syndicated loan of 10 billion shillings, coordinated by Mashreq Bank.
The loan will have a maturity of two and three years for both tranches. The proceeds of the loan will be used for new loans and general purposes.
Victoria Commercial Bank (VCB) also received a 500 million shillings Level II subordinated loan from SwedFund, a Swedish development finance institution.
Kenya Cooperative Bank also received 15.2 billion shillings from the International Finance Corporation (IFC).
] "Issues such as those of the International Finance Corporation at the Co-operative Bank were valued at London Interbank Offered Rate (LIBOR), plus an unspecified premium. The current 12-month LIBOR rate is 2.8%. "
The latest data from Kenya's National Bureau of Statistics indicates that average deposit rates rose 8.3% in December 2017 at 7.3% in December average bank lending rates remained unchanged at 13.6% in December 2017.
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