Government three-month borrowing rate rises to cost of consumer loans
Banks are rushing to increase cost on their loans after the rates at which the government borrows for three months rose to near average consumer loans’ lending rates. Banks and pension funds have increased the rates on risk free government debt from 9.4 in January to 12 percent signaling a rise in borrowing rates for individuals and corporates that stood at 13.1 percent in April. Equity Bank was the first lender to abruptly increase rates from 12.5 percent to 14.6 percent in January. Borrowers will pay over 20 percent once risk and premiums are factored into the loan price. A note from NCBA to customers…
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