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Smaller Lenders Dominate Group of 14 Banks Raising Loan Rates

Fourteen of 38 commercial banks raised their average lending rates, with smaller lenders making up most of the group, according to Business Daily Africa (direct).

By Teqwah Desk05 Oct 22:02Updated 05 Oct 22:031 min read

Smaller Lenders Dominate Group of 14 Banks Raising Loan Rates — Photo: Business Daily Africa (direct)

Key takeaways

Fourteen of 38 commercial banks increased their average lending rates.
Smaller banks accounted for most of the lenders raising rates.
The report links more expensive lending at small banks to costly funding.

Higher borrowing costs are concentrated among a group made up mostly of smaller banks. Fourteen of 38 commercial banks increased their average lending rates—the interest charged on loans—according to Business Daily Africa (direct).

The report links more expensive loans at small banks to costly funding, meaning the money banks obtain to finance their lending. That puts the cost of securing funds at the centre of the story.

The figures show that the increases were not universal. Fewer than half of the 38 banks raised their average rates. The source does not specify how much rates increased or describe rate changes at the other lenders.

For businesses borrowing from the banks that raised rates, the issue is the price of credit. What to watch next is whether more lenders increase their rates and whether funding costs remain a pressure point.