The World Bank has raised concerns over the increasing levels of non-performing loans in the Kenyan banking sector, which it argues risk plunging local banks into losses.
In its Country Policy and Institutional Assessment report for Sub-Saharan Africa, the multilateral lender noted that while Kenya's banking sector was sound and stable, non-performing loans remained a major vulnerability.
According to the World Bank in its annual report published on Friday, September 5, the surging levels of non-performing loans expose Kenyan banks to additional losses and could erode their capital buffers.
The report highlights that regionally, non-performing loans are highest in Ghana at 22 per cent, followed by the Republic of Congo at 15.2 per cent, and then Kenya at 14.3 per cent.
