22 banks get approval for risk-based loan pricing

This
is according to data shared to Citizen Digital by the Kenya Bankers Association
(KBA).
The
banking sector lobby was nevertheless yet to share the list of the 22 banks
before the publishing of this article.
The
approvals nevertheless cover mid and low-tier lenders with only Equity Group
and Absa Bank Kenya receiving the regulatory nod among big banks.
The
lengthy delays to the approval of banks' risk-based pricing models has been
attributed to the ‘case by case’ consideration of the models by the CBK.
Sources
however indicate the CBK is set to accelerate the rate of approvals following
the end of the electioneering period.
Among
banks expectant of approvals in the near term include KCB Group and Stanbic
Bank Kenya.
Despite
receiving the nod for risk-based pricing, most lenders are yet to implement the
model on a bearish economic outlook.
Equity
Group which for instance priced its most costly loan at 13 per cent in six
months to June says the current difficult economic environment has seen the
lender pause effecting the risk-based pricing formula to loans and advances to
customers.
KCB
Group which awaits the regulatory nod has meanwhile stated that it sees risk-based pricing being applied to new and not existing customer loans.
The
implementation of risk-based pricing was born out of the 2019 Banking Sector
Charter which envisions transparency and customer centricity in the pricing of
credit.
Banks have no deadline to have their risk-based pricing models approved.
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