Equity Bank raises interest rate to 25 per cent

Equity Bank has joined banks that have recently increased their interest rates on loans, spelling hard times for borrowers, most of who are in small-and -medium enterprises.

Through an advertisement in the press on Wednesday, the bank raised its interest rates to 25 per cent up from 14 per cent, with effect from November 15.

“We have in the past endeavoured as far as possible to cushion our customers by maintaining our interest rates for the last six months,” the advert said.

The bank said the economy continued to be affected by rising inflation caused by a surge in oil and food prices, global economic melt-down, depreciating and weakening shilling, which contributed to the prevailing high interest rates environment.

Compelled

“We have, therefore, been compelled to adjust the bank’s lending interest rate to 25 per cent with effect from November 15,” it said.

However, the bank added that this was not the base rate but applicable interest rate.

The Monetary Policy Committee last month raised Central Bank Rates to 16.5 per cent to rein in inflation and weakening of the shilling, which led to banks’ increasing their interest rates.