The Bank of Kenya expects that private sector credit growth will be strengthened by the end of this year as monetary policy easing reduces loan interest rates and improves borrowing conditions for households and businesses. The Central Bank of Kenya (CBK) market perception survey shows that bank respondents have indicated a decrease in interest rates, which has encouraged new loan applications and eased the repayment pressure on existing floating rate loans. This survey targets the CEOs and other senior executives of 400 private enterprises, including commercial banks, microcredit banks, and non bank private enterprises such as hotels. It is expected that lower borrowing costs will increase disposable income, especially for businesses and households that are repaying their debts, thereby supporting overall economic demand. The survey shows that the improvement in credit growth expectations is also due to the stable macroeconomic conditions observed in 2025. The study states that lending institutions point out low inflation as a key factor supporting credit demand, believing that price stability reduces uncertainty and improves borrowers' planning conditions. A survey shows that stable inflation helps maintain purchasing power, alleviate operational cost pressures, and make credit supported consumption and investment more feasible.
