Kenya banks have emerged as the country most profitable sector. of all the 43 banks in the country they made profits except for the four banks which reported loses.
Banks are making this super normal profit after charging high interest rates that they offer its customers. it is considered that Kenya is among the African continent that loans are the most expensive.
The relationship between the interest rate and prices of goods and services
is clearly related. when the interest rate are high this lead to the sharp increase in prices of goods as limit the circulation of money in the country.
This month the KBA Kenya bankers association and treasury announced that commercial banks have began the pilot implementation of the annual percentage rate APR. this is a pricing mechanism which will enable consumer to compare different bank loans cost based on standardized parameters and a common computation model.
APR takes into account the following factors
1.interest rate components:
2. bank chargers and fees
3. third party cost,legal fees, insurance costs, valuations fees and government levies.
