Bad loans affecting real estate sector-Central Bank of Kenya

Building and construction industry and the real estate, the two fast-growing sectors, are heading for tough times after a status report by the Central bank of Kenya (CBK) indicated that they are adversely affected by bad loans. From January to March, the real estate sector saw bad loans rise from 129 million U.S. dollars to 155 million dollars while the building and construction sector moved from 103 million dollars to 134 million dollars.
"The spill-over effects of high lending interest rates and challenges in the business environment in the first quarter contributed to the increased Non-performing loans. However, banks continue to deploy enhanced credit appraisal standards to mitigate credit risk," said the report.