Increased Kenyan economic activity 'causing credit demand'

30 nov 2009

The increased demand for credit in Kenya is a factor of higher economic activity, according to an expert.

The increased demand for credit in Kenya is a factor of higher economic activity, according to an expert.

Njuguna Ndung'u is governor of the country's central bank and spoke as it emerged that the total loan stock to private borrowers from commercial banks rose by 16 million Kenyan shillings (£0.13 million) between September and October.

A report in Business Daily Africa said Professor Ndung'u pointed to statistics showing an upward trend in consumption, with consumer spend bolstered by the increased lending to households that is anticipated.

However, he warned: "We are not out of the woods yet," referring to the decision in recent weeks to bring the national bank rate down to seven per cent.

But he added that levels of increased lending were positive signs of an economic recovery.

Meanwhile, reports of "rogue dealers" using improved internet on the continent to conduct private foreign currency trading emerged this week in the East African.

The publication suggested commercial banks could be losing "billions of shillings" from dealers who communicate with their employers' competitors.