Banks Announce Reduced Interest Rates, Inside the Scandal in KUSCCO & Lucrative Outer Ring Road Tender

Hello and welcome to today’s edition of The Business Roundup. In this edition, we bring you the latest updates on economic trends shaping Kenya’s business landscape, including the latest from the banking sector where banks have slashed interest rates.

M-Oriental Bank was the first to announce a reduction in its interest rates by at least 0.5 per cent after the Central Bank of Kenya- CBK’s move to lower its benchmark rate.

Other banks have since followed suit with Cooperative, KCB, and Equity making subsequent announcements of reduced interest rates.?

Subscribe?today and stay updated on top news stories in The Kenya Times Business Roundup. The Roundup presents a compilation of business stories that hit headlines throughout the week.

Banks Offering Cheaper Loans

M-Oriental Bank confirmed that its lending rates would drop from 16.5 per cent to 16.0 per cent. ?According to the bank, the new rates will take effect from March 1, 2025.

The bank said this will apply to all existing and new Kenya Shilling-denominated credit facilities.

Additionally, M-Oriental stated that it will continue to assess the market and advise accordingly in case of any further changes.

Cooperative Bank also announced a 2% reduction in its Base Lending Rate from 16.5% р.а. to 14.5% p.a plus a margin of between 0% p.a. to 4% p.a. based on the individual customer’s credit profile.

According to the lender, the reduction was to take effect immediately.

KCB bank also lowered its base lending rate. In an announcement, the lender notified its customers and the public that it had reduced its base lending rate from 15.6% to 14.6% per annum.

At the same time, KCB explained that it will apply the new lending rate based on a customer-specific margin, which is adjusted to the base rate in line with the approved Risk-Based Credit Pricing Model.

Equity Bank Limited has also announced a reduction in interest rates for all new and existing Kenya Shilling-denominated credit facilities. This change will take effect on February 13th, 2025, for new loans, and on March 1st, 2025, for existing loans, with a reduction of 3%.

The revised interest rates will include the updated Equity Bank Reference Rate (EBRR) of 14.39%, plus a margin that is based on the specific risk profile of each customer.

KUSCCO Top Officials on the Spot for Allegedly Embezzling Funds

Meanwhile, senior officials of the Kenya Union of Savings and Credit Cooperatives (KUSCCO) are under scrutiny following allegations of financial misconduct.

A forensic audit by PricewaterhouseCoopers (PwC) exposed fraudulent practices, including the falsification of financial statements and fund misappropriation, leading to an estimated loss of Ksh 13.3 billion.

The audit further revealed that the executives manipulated financial records, forged signatures, and authorized unauthorized withdrawals and loans. As a result, KUSCCO has been rendered insolvent, jeopardizing the savings of numerous Sacco members.

The audit report also noted that KUSCCO officials borrowed and defaulted on internal loans totaling Ksh489.2 million. Many of these officials violated a policy that restricts borrowing to a maximum of five times a member’s deposits.

Cooperatives and Micro, Small, and Medium Enterprises Cabinet Secretary Wycliffe Oparanya has forwarded the audit report to the Inspector-General of Police for further investigation and potential legal action.

What CS Oparanya said:

“I request that several agencies undertake the necessary legal and administrative actions following further investigations to support litigation concerning criminal and economic crimes. I also urge the commencement of processes for asset recovery.”? ?

About KUSSCO

KUSCCO is the central organization for SACCOs in Kenya. Its mandate is to advocate for and represent SACCOs to ensure formation and growth of robust SACCOs.

KURA Floats Ksh 7.6 Billion Tender for Outer Ring Road

The Kenya Urban Roads Authority (KURA) invited bids for a major infrastructure project along Nairobi’s Outer Ring Road after securing a Ksh 7.6 billion loan from South Korea.

This funding is meant to support the establishment of the Bus Rapid Transit (BRT) Line 5 Project along the Outer Ring Road in Nairobi.

KURA announced that the bidding process will be conducted in line with Competitive Bidding (CB) procedures, as outlined in the Economic Development Cooperation Fund (EDCF) procurement guidelines.

The bidding process is restricted to firms from the Republic of Korea. Interested bidders must meet the following minimum requirements:

1. Professional Experience: Must have successfully completed at least two projects of a similar nature within the last ten years.
2. Financial Capability: Bidders must provide detailed financial information demonstrating their capacity to undertake the project. Their net worth for the last three years (2021, 2022, 2023) must be positive.
3. Turnover and Cash Flow: A minimum average annual construction turnover of USD 30 million (Ksh 3.9 billion) is required, along with demonstrated access to USD 5 million (Ksh645.5 million) in liquid assets.A photo of a BRT terminus along Thika Road.

ALSO BIG THIS WEEK

• The government through a cabinet dispatch announced plans to improve drainage systems and walkways, among other upgrades to modernize the Jomo Kenyatta International Airport (JKIA).
• The Kenya National Police Deposit Taking Savings and Credit Co-operative Society Limited (Kenya National DT SACCO) announced that it posted a profit of Ksh2.5 billion for the year ended December 31, 2024.
• Safaricom introduced an offer of?Ksh 500 reward to customers who refer others to Safaricom Fibre. Users can generate a referral code by dialing 4008#.
• Airtel Kenya launched a new Progressive Web App (PWA),?Airtel Lite, aimed at providing a lighter, faster, and more accessible self-care experience for its users.
• Survey involving 1,000 CEOs across various sectors provided President William Ruito with a roadmap for improving Kenya’s business and economic environment.?

Currency Trends

According to the latest data by Central Bank of Kenya (CBK), the Kenya Shilling exchanged at Ksh129. 21 against the dollar on February 12. The Kenyan shilling strengthened slightly against the U.S. dollar on Wednesday, which is attributed to inflows from diaspora remittances and central bank support.

Govt Tenders, Auctions and Jobs

• The Kenya Veterinary Board (KVB) invited applications for pre-qualification of suppliers and tenders from interested and eligible bidders for various goods, services and works for the financial years 2024/2025-2025/2026 with deadline being February 25.
• Kenya Power invited tenders from interested bidders for the provision of items such as network fault indicators with the closing date of the tender being March 6, 2025.
• Masinde Muliro University of Science and Technology invited eligible and interested contractors to apply for the following Tenders: Supply, Installation, Testing and Commissioning of Electrical Engineering Teaching Laboratory Equipment with the deadline being March 4, 2025.
• South Nyanza Sugar (SONY) Company advertised 15 vacancies for suitable candidates to apply. The deadline for candidates to submit their application is February 25, 2025.

Follow our?WhatsApp Channel?and join our?WhatsApp Group?for real-time news updates