Kenya Bad-Loan Ratio Stays Near 15% as State Arrears Choke Private-Sector Liquidity
Updated
Updated · Bloomberg · Jul 21
Kenya Bad-Loan Ratio Stays Near 15% as State Arrears Choke Private-Sector Liquidity
1 articles · Updated · Bloomberg · Jul 21
Summary
Moody’s said Kenya’s non-performing loan ratio is likely to remain stuck around 15%, leaving the country with the highest bad-loan burden among East African banking systems.
State arrears are the main drag, the ratings firm said, because unpaid government bills are squeezing private-sector liquidity and weakening borrowers’ ability to service debt.
A 425-basis-point easing cycle has not broken that pattern: the Central Bank of Kenya’s benchmark rate has fallen to 8.75%, even as asset quality remains stubbornly weak.
The outlook points to a banking sector where broader conditions may improve, but loan books will stay under pressure until the government clears arrears more effectively.