This archive report was first published on 19 July 2021.
On July 19, 2021, the Central Bank of Kenya (CBK) released data showing that the savings rate had dropped to 2.55 percent in May, the lowest since August 2016 when it stood at 1.68 percent.
This marked a significant decline from the 4.18 percent savings rate recorded in May last year.
The savings rate is payable to savings accounts, which allow depositors to add funds to the account occasionally but are limited on withdrawals and transfers.
Interest rates paid on large fixed deposits with short-term maturities of between three months and one year remained constant at 6.3 percent between April and May.
However, the lending rate increased to 12.06 percent in May from 11.95 percent a year earlier, indicating that lenders are enjoying wider margins in their financial intermediation business.
The banking sector's gross deposits stood at Sh4.16 trillion in April, up by 11.2 percent from a year earlier, while gross loans were up by 7.3 percent to Sh3.08 trillion in the period.
As a result, annualised private sector credit growth slowed down to 6.8 percent in April 2021, from nine percent in April 2020.
