Kenyans took loans to fund Christmas activities whereas they still owe Sh100,000 each in public debt

Demand for credit increased in the personal/household sector during the festive period

The study observed that demand for credit went up during the festive season at a time when the country was facing an economic downturn owing to the protracted elections.

“Demand for credit increased in the personal/household sector. This increase was attributed to increased demand for credit due to the festive season in December 2017," said the survey dubbed CBK Commercial Banks’ Credit Officer Survey October - December 2017.

On the other hand, the heightened political activity towards the end of last year saw demand for credit among real estate developers decline.

"Demand for credit in the building and construction sector decreased, with 32 per cent of the respondents indicating so. This may be attributed to a challenging business environment,” said CBK.

The protracted electioneering period took a toll on the property market with most developers suspending any new projects due to the uncertainty created by the political heat.

Banking sector performance

The Kenyan Banking Sector recorded growth in the quarter ended December 31, 2017, compared to the quarter ended September 30, 2017

There was a slight increase in gross loans to Sh2.45 trillion in December compared to Sh2.39 trillion in September.

Lenders were also divided on the impact of the law on interest rate cap, but they agreed that small businesses would be affected by the law.

Public debt

Kenya's growing appetite for borrowing was brought to the fore last week after the government secured a Sh200 billion ($2 billion) loan from international lenders in form of a Eurobond.

The issuance of the loan has now seen Kenya sink into a Sh4.8 trillion debt which means every citizen owes the lenders Sh100,000, assuming the population stands at 48 million people.

Credit ratings agency Moody’s downgraded Kenya’s debt rating to B2 from B1 while officials were in the middle of the bond roadshow abroad, angering the government.

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