Kenyan banks’ non-performing loan (NPL) ratios are among the most elevated among major economies in Africa, and are likely to be exacerbated by continued delays in payment by government to contractors and suppliers who owe lenders billions of shillings.
Global ratings agency Moody’s says in a new report on African banks that weak risk-management practices in the past have also contributed to the fairly high dud assets ratios among African banks, with many of those assessed lying above 10 percent.
Latest Central Bank of Kenya (CBK) data shows the ratio of bad loans to total loan book among Kenyan banks stood at 12.3 percent at the end of October, having come down from 12.7 percent in August largely due to improved recovery efforts on the trade, personal and household sectors.
Out of 11 African countries profiled by Moody’s in the report, only Angola, Ghana and Democratic Republic of Congo have a higher ratio than Kenya, at about 25, 22 and 18 percent respectively.
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