Commercial Lending Rates Weighing On Growth

The Central Bank of Kenya cut interest rates by 75 basis points to 6.0% in an attempt to persuade private banks to reduce their lending rates, which stood at 14.6% in June 2010. Although the commercial bank lending rates have been in decline since March, the pace at which rates have been falling has not matched the relatively sound position of Kenya's economy. As a result, manufacturing and industrial growth is suffering, which is restricting the expansion of Kenyan companies into other African markets and is inhibiting overall economic growth.

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