Kenya: Central Bank to publish comparative banks loan data
It will be easier for borrowers to identify cheap lenders.The Central Bank of Kenya (CBK) announced on Friday (February 13th) that it was going to publish the Kenya Banks' Reference Rate (KBRR) data "to enhance transparency."
"The Central Bank will publish comparative data for various loan products offered by banks. This will facilitate decision making by customers and promote competition in credit pricing," said the bank, quoted by The Star.
When it was first introduced on July 8, 2014 the CBK set the KBRR at 9.13 per cent. It was then reviewed to 8.54 per cent in January 2015.
"The KBRR should be seen as the minimum price for banks to participate in the credit market. The charges may relate to the individual customer's risk profile, the type of loan or the risks associated with the investment," the CBK said. It added that banks should explain any charges above the KBRR to the customer.
The scheme was initiated by the Kenya Bankers Association (KBA) in collaboration with the Central Bank of Kenya.
KBA's CEO Habil Olaka told Nairobi Business Monthly that enhancing pricing disclosures will enable bank customers to make more informed choices. "This is one of the mechanisms embraced by banks to address issues relating to easing access to credit," he said.