Kenyan banks are experiencing a significant disparity in lending rates, with a nearly 800-basis-point spread between the cheapest and most expensive lenders. Citibank N.A. Kenya offers the lowest rate at 10.80%, while Bank of Africa Kenya charges as much as 18.57%. This divergence raises questions about the overall health of the banking sector.
Key statistics:
- Kenya’s average lending rates fell to 14.70% in March 2026, the lowest since December 2023.
- The deposit rate decreased to 6.86%, its weakest level since August 2022.
- Private sector credit growth reached 8.1% year-on-year in March 2026, marking the strongest growth since January 2024.
- 34 out of 38 banks recorded lower lending rates year-on-year.
The Financial Stability Board (FSB) has raised concerns about vulnerabilities within the private credit market, particularly regarding borrower credit quality and valuation opacity. The FSB encourages authorities to close data gaps and harmonize definitions for better monitoring of private credit.
Reliance Bank has taken steps toward digital transformation by selecting Temenos SaaS. Nikki Fenton, CEO of Reliance Bank, stated that implementing Temenos SaaS is crucial for their strategy. The move aims to enhance operational efficiency and improve customer service.
The gross non-performing loan ratio edged up to 15.6% in March from 15.4% in December 2025. This slight increase indicates ongoing challenges for banks as they navigate financial stability issues.
The Monetary Policy Committee (MPC) held the Central Bank Rate (CBR) at 8.75% on April 8, pausing the easing cycle amid concerns over inflation and economic growth. The next steps for Kenyan banks will depend on how they manage these challenges while fostering credit growth.
