On average, the annual interest rate for the Kenyan top 10 most expensive bank loans is within a range of 13.8% – 14.5% for the various categories of loans offered.
This is approximately 7.0% points higher than South Africa’s average annual rate which stands at 7.5% and 11.2% higher than USA’s 3.3%.
However, Kenya’s average annual interest rate is 6.5% lower than Ghana’s average lending rate of 21.0%. We note that the high cost of credit has been one of the major challenges hindering the growth of the private sector.
Most Kenyans often keep off loans from the banks because of the requirements and the processes to be followed before one can get a loan. One needs among other things security as well as good books in terms of receiving cash into the account.
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Additionally, digital lending apps have continued to charge high costs and consequently resulting in borrowers being affiliated with high-interest rates leading to a rise in defaults.
Among the banks, which are the most expensive bank loans according to the calculations found on the Kenya Bankers Association (KBA) website?
- Absa Bank Kenya
- Sidian Bank
- Ecobank
- Family Bank
- StanChart Bank
- Equity Bank
- May Fair Bank
- Stanbic Bank
- Bank of Africa
- Co-operative Bank
- GT Bank
Absa Bank Kenya comes up as the most expensive bank loan in Kenya. A borrower taking a 1 million shillings personal secured loan for one year from Absa will incur a total credit cost of 143,007 shillings.
The same loan size on similar duration at Sidian Bank will cost 140,807 shillings, Ecobank Kenya at 121,407 shillings, Family Bank at 115,624 shillings, Standard Chartered Bank Kenya 115,000 shillings, and Equity Bank 108,057 shillings.
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Despite being categorized as the most expensive, Kenyans still prefer the above banks given their history of professionalism and how they handle loan requests from customers. The procedure to apply for loans in most of them is clear and open.
The ranking above is based on tabulations of banks’ charges on the website developed by the Kenya Bankers Association (KBA) and the Central Bank of Kenya (CBK) to boost transparency and competition in the lending market.
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