Less than a hundred days after the United Democratic Alliance party rode to power on the populist wave of empowerment for the low-earning workers popularly known as Hustlers, the hits that this financially-minority group keeps getting are increasing by the day.
Just hours after Trade Cabinet Secretary Moses Kuria gave squatters occupying land in Machakos earmarked for a cement factory a serious tongue-lash, the latest report from the Central Bank of Kenya shows even worse times for Hustlers.
Kenyan-born international Economist Mohammed Wehliye took to Twitter to share the latest Treasury Bonds, noting William Ruto’s determined austerity measures but warned that Liquidity is drying up. His tweet read,
Mohamed Wehliye,
MBS @WehliyeMohamed
Market has at last believe the Ruto administration is serious about austerity. The 300b budget cut trick working. Liquidity is loosening up it seems!
Liquidity is the availability of physical cash money in the society, and lack of it reduces mobility thus availability of purchasing power, and this mostly affects microfinances.
Coming on the back of this is a report that commercial banks are now charging large companies higher interest rates on loans compared to start-ups and individual borrowers. New data from the Central Bank of Kenya (CBK) showed this, while also pointing to higher risk perception of larger firms who have in the past two years accounted for the bulk of the spike in non-performing loans.
The CBK data on lending rates by category of borrowers shows that corporate firms paid 13.95 percent on average on loans of between one and five years in September, up from 11.9 percent a year earlier.
For their part, smaller businesses, which a year ago were paying the highest average rate at 12.5 percent, are now being asked for 13.8 percent as the loan pricing seesaws in their favour.
Personal loans to individuals were attracting an average interest rate of 13.2 percent in September, up from 12.1 percent a year earlier.
Corporate borrowers have traditionally paid lower interest on loans compared to smaller businesses and individuals on account of lower risk of default.
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