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CBK: Borrowers to be advanced based on risk assessment

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Borrowers with less reliable incomes are expected to access credit with higher interest rates as the Central Bank of Kenya clears additional banks risk based pricings models.

The CBK Governor Patrick Njoroge says the regulator has concluded talks with 33 out of 39 banks on their loans pricing mechanisms.

The banking system has been calling for the central bank to fast track the shift of banks to a risk based loan pricing since the interest capping law was repealed.

Under the model, borrowers will be advanced based on their risk assessment.

Speaking during the MPC briefing the CBK governor Patrick Njoroge said the high sugar prices has increased food inflation, and that the sweetener prices will still remain high due to low production in Brazil that is experiencing poor rains.

CBK retained its base lending rate at 9.5 percent. Inflation in the month of April decreased to 7.9 percent sfrsom 9.2 percent in March on account of low food prices.

Njoroge said the 68.5 billion shillings syndicate loan has already checked in, with Kenya set to receive an additional 13.7 billion shillings loan from the African Development Bank.

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