Last edited by Yokus
Thursday, July 16, 2020 | History

4 edition of Banking sector interest rate spread in Kenya found in the catalog.

Banking sector interest rate spread in Kenya

by Njuguna Ndung"u

  • 102 Want to read
  • 30 Currently reading

Published by Kenya Institute for Public Policy Research and Analysis in Nairobi, Kenya .
Written in English

    Places:
  • Kenya
    • Subjects:
    • Interest rates -- Kenya -- Econometric models.

    • Edition Notes

      StatementNjuguna S. Ndung"u and Rose W. Ngugi.
      SeriesKIPPRA discussion paper ;, no. 5
      ContributionsNgugi, Rose.
      Classifications
      LC ClassificationsHG1623.K4 N38 2000
      The Physical Object
      Paginationviii, 42 p. :
      Number of Pages42
      ID Numbers
      Open LibraryOL3737817M
      ISBN 109966949046
      LC Control Number2003405856
      OCLC/WorldCa51932208

      Credit default risk has been cited as the primary cause of bank failures in Kenya. Between and there were a total of 29 bank failures reported. This is an alarming rate given that it represents on average two or more bank failures per year during that period. Though this trend has been reversed, credit default risks continue to be a major challenge among banks. Banking Sector Multiples Kenya’s banking sector is trading at an average PBV of x and a PE of x Source: NSE, Cytonn Banking Sector Report * Share prices are as at 14th June, The Banking sector has become cheaper on a PBV basis having dropped to x from x in FY’ Bank Share Price * No. of Shares Issued (bns) Market Cap (bns).

      inclusions. Agency banking is a model that is aimed at enhancing financial inclusion by reaching out to millions of people in need of financial services. According to bank supervision and annual report (), the banking sector in Kenya comprise of the 44 banking institutions, 9 microfinance banks, 2 credit reference bureaus, A bank is a financial institution that accepts deposits and recurring accounts from the people and creates Demand Deposit. Lending activities can be performed either directly or indirectly through capital to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve.

      Interest rate spread is vital for economic growth and development because it is linked to financial intermediation which has a critical link to economic growth (Shahzad, Lodhi & Athar, ). Robinson () indicated that the size of the banking sector interest rate spread serves as an indicator of efficiency in the banking sector because it.   Banking sector is also recovering from bad loans, which had dampened the credit market. Rwandans positive about as interest rate dip grows loan books. Monday December 30 Kenya’s biggest lender by assets, KCB Group, also announced plans to buy a bank in Rwanda and one in the DR Congo, but this too is yet to materialise.


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Banking sector interest rate spread in Kenya by Njuguna Ndung"u Download PDF EPUB FB2

FACTORS INFLUENCING INTEREST RATE SPREAD AMONG COMMERCIAL BANKS IN KENYA EMILY GATUNE - - Vol. 2 (74), ppS, ©strategic Journals FACTORS INFLUENCING INTEREST RATE SPREAD AMONG COMMERCIAL BANKS IN KENYA microstructure characteristics of the banking sector and the Kenya policy environment.

This paper examines and empirically investigates factors that drive the interest rate spread in Kenya's banking sector. Both bank-specific and macroeconomic factors are considered. The empirical analysis is based on panel data of commercial banks for the period –Cited by: As time progressed, the changing landscape of banking began to note the entrance of fully indigenous banks.

Kenya’s first fully locally owned commercial bank was the Co-operative Bank of Kenya, which was initially a co-operative society. It served the needs of growing farming communities and started operations in.

The last decade has been a period of dramatic changes for the banking sector in Kenya. Interest charged to borrowers rose to thirty percent and above in while interest if the banking sector’s interest rate spread is large it discourages potential savers due to low returns on deposits and thus limits financing for potential borrowers File Size: KB.

Interest Rate Spread Interest rate spread is defined by market microstructure characteristics of the banking sector and the policy environment (Ngugi, ).

Risk-averse banks operate with a smaller spread than risk-neutral banks since risk aversion raises the bank’s optimal interest rate and reduces the amount of credit supplied. the Kenya’s financial sector to vulnerabilities emanating from the trade tensions, weak demand in advanced economies, tight global financial conditions and operational risks.

The assets of the banking subsector, which amounted to percent of the GDP, grew by percent due. WANJIRU DRNGUGIROSE. "Njuguna Ndung'u and Rose W. Ngugi. Banking Sector Interest Rate Spread in Kenya. KIPPRA Discussion Paper # 5.". In: Paris World Cup in Paris, France.

The Icfai University Journal of Architecture, Vol. II No.1, February ; Abstract. Total interest earned was $ billion (in green) for the bank from their loans and all investments and cash positions.

Net interest income (in blue) totaled $ billion for and is the. A Comparative Analysis of Interest Rate Spread in the Banking System Dr. Md Ezazul Islam (DGM), Mr.

Habibour Rahman (JD)* Introduction Financial sector spread measures the effectiveness of the bank’s intermediation function in borrowing and lending money and also the intensity of competition among banks (Rose, ). The banking industry in Kenya is governed by the Companies Act, the Banking Act, the Central Bank of Kenya Act and the various prudential guidelines issued by the Central Bank of Kenya (CBK).

The banking sector was liberalised in and exchange controls lifted. Kenya banking sector is in poor health Thursday, Octo environment for the banking sector predates the rate-capping law.

of the folly of imposing interest rate caps in an. In Kenya, the banking sector plays a dominant role in the financial sector, particularly with respect to mobilization of savings and provision of credit.

African countries, particularly at the bank-level, like Kenya are still grappling with the challenge of higher interest rate. NIC became a public company in and is currently quoted on the Nairobi Stock Exchange with approximat shareholders.

Barclays Bank of Kenya Limited acquired 51% of NIC’s total shares through the acquisition of Mercantile in the s and Standard’s shareholding in NIC in the s. Between andBBK divested its shares, selling 38% of its shares to the public in An Empirical Analysis of Interest Rate Spread in Kenya "The study aimed to explain the factors determining interest rate spread for Kenya’s banking sector.

For the pre-liberalization period, the minimum and maximum ceilings on deposit and lending rates set a. The banking sector's profitability increases with interest rate hikes.

Institutions in the banking sector, such as retail banks, commercial banks, investment banks, insurance companies, and.

"The study aimed to explain the factors determining interest rate spread for Kenya’s banking sector. For the pre-liberalization period, the minimum and maximum ceilings on deposit and lending rates set a maximum interest rate spread. Variations in the spread reflect monetary and fiscal policy acti.

Kenya’s banking sector benefits from healthy fundamentals, which in turn has ensured steady growth in lending and assets, and strong performances for listed creditors. However, provided the sector with its fair share of challenges to navigate.

Nevertheless, the outlook for the country’s lenders is positive. A key driver of growth among Kenyan banks remains their ability to tailor. The paper empirically investigates the determinants of interest rate spread in Kenya's banking sector based on panel data analysis. The findings show that bank-specific factors play a significant.

Abstract. The banking industry is a major driver of economic development for world economies. By offering different types of services, such as facilitating money transfers between countries and ensuring that savers and borrowers are brought together in well-organised structures, the industry determines countries’ economic development and long-term sustainability.

Consequently, the Net Interest Margin (NIM) in the banking sector as at FY’, stood at %, a decline from the % recorded in FY’, mainly due to the faster growth in average interest-earning assets which grew by % in FY’ outpacing the % growth in Net Interest Income, and.

tourism sector Positive Positive Interest Rates The CBR increased bps to % in August with the day starting year at a rate of % The CBK reduced the CBR by bps to % and the 91 -day T-Billhit a low of % before bottoming out and starting on an upward trend.

Interest rates expected to start on a downward trend, at.The investigation reveals that interest rate spread in Namibia is determined by Treasury bill rate, inflation rate, the size of the economy, financial deepening, bank rate or discount rate and.The impact of interest rate caps on the financial sector: evidence from commercial banks in Kenya (English) Abstract.

Interest rate caps can have far-reaching consequences on the composition and maturity of commercial bank loans and deposits. This paper carefully documents these impacts on the formal financial sector in Kenya after the recent.