Arab Today, arab today un decries africas high interest rates
Last Updated : GMT 02:34:15
Arab Today, arab today
Arab Today, arab today

UN decries Africa's high interest rates

Arab Today, arab today

Arab Today, arab today UN decries Africa's high interest rates

High interest rates in Africa
Nairobi - XINHUA

The United Nations on Friday decried the prevailing high bank interest rates in the continent which has discouraged many investors to take credits from banks.
The United Nations Economic Commission for Africa (UNECA) Senior Economic Affairs Officer Andrew Mold told Xinhua that the situation is partly caused by the big spread in interests maintained by the banks.
"This situation is unjustified because it limits the amount of credit that is lent to the private sector," Mold said during the launch of the African Development Bank on Eastern Africa's manufacturing sector.
He said the difference between deposit interest and loan interest in the continent is around ten percent.
This compares unfavorably with the developed economies where the spread is approximately five percent. "This situation makes it very difficult for the private sector to access finance," he said.
"On average less than 20 percent of the working capital of Africa's private sector is derived from commercial banks," he said. The rest of the funds is sourced from reinvested profits, or the capital markets.
On July 9, the Central Bank of Kenya (CBK) and Treasury implemented a new loan-pricing rule to determine borrowing rates charged by commercial banks.
The CBK is now implementing the Kenya Banks Reference Rate (KBRR), a loan-pricing formula that is based on averages of the CBK indicative rate and the 91-day Treasury bill yield over six months.
The KBRR will be the base rate for all commercial banks' lending and will be reviewed every six months, hence the interest rate on a borrower's loan will keep changing after every six months.
With the indicative rate standing at about 9 percent in over one year, most banks have been charging more than double the amount, raking in huge profits.
The rate has been maintained at the level since April 2013, with CBK noting that inflation is under control and the shilling has stabilised.
According to the UNECA, the high cost of credit reduces the amount of investments in the region. Mold urged African governments to put in place policies that will reduce the cost of credit.
"One way is to encourage competition in the banking sector," he said. The financial sector suffers from high levels of inefficiencies.
"This means that the high operational costs are passed on to consumers through high loan interest rates," Modi, who is also the UNECA Chief of Sub-Regional Data Centre, said.
The banking sector is one of the most profitable businesses in Africa. "In Kenya, for example the top corporations are usually banks," he said.
Modi added that most of the industry's revenue is derived from trading in government securities rather than from lending to the private sector. "The private sector is perceived to have higher risk of default," he said.

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today un decries africas high interest rates Arab Today, arab today un decries africas high interest rates

 



Arab Today, arab today
Arab Today, arab today Nasima Gamei revives Algerian heritage in jewelries

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives Algerian heritage in jewelries
Arab Today, arab today Saudis await visitors but will they come?

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Blind sheikh buried in Egypt

GMT 06:32 2017 Thursday ,23 February

Blind sheikh buried in Egypt
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success

GMT 16:32 2017 Wednesday ,22 February

US Treasury chief tells IMF to monitor currencies

GMT 16:08 2017 Wednesday ,22 February

Qatari banks merger to rebalance financial sector

GMT 05:57 2017 Wednesday ,22 February

Britain risks clash with EU over RBS bailout

GMT 05:26 2017 Wednesday ,22 February

Singapore carbon tax would hit refiners, help renewables

GMT 05:18 2017 Wednesday ,22 February

Chinese PM: US should avoid ‘trade war,’

GMT 20:59 2017 Tuesday ,21 February

Economy good, but homes in German cities overpriced

GMT 05:29 2017 Tuesday ,21 February

Sovereign funds pulled $38bn from markets in 2016
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Salma Rashid happy for 'A Whisper of Love'

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:22 2017 Monday ,20 February

Kanye West puts hijab-wearing model
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday