Central Bank of Kenya announces expansion of affordable credit
The Central Bank of Kenya's Monetary Policy Committee (MPC) recently decided to lower the CB rate (CBR) by 25 basis points, bringing it down to 6.75 per cent.Speaking at the 12th seminar by the African Economic Research Consortium at Mombasa the day before the CBR was lowered, Governor of the bank Professor Njuguna Ndung'u said previous reductions in the rate had not triggered the desired response from banks.
He told delegates: "To support economic development, there is need for the development of banking products that support long-term lending. These development banking products will play a significant role in influencing a downward trend in commercial banks' lending rates."
One reason why the MPC decided to lower the CBR from seven per cent was because economic recovery in Kenya is still deemed fragile and cost of credit was hindering growth in the country.