Banks Urged to Adopt Credit Ratings

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Credit rating firm Agusto & Co. has urged Kenyan banks to adopt credit rating models to ensure fair loan pricing and transparency. The firm said reliance on collateral-based lending hinders risk assessment and recommends a data-driven evaluation aligned with the Central Bank’s new Kesonia benchmark. Despite CBK cutting the rate to 9.25%, bank lending spreads remain at a nine-year high of over seven points. Agusto noted that credit ratings will promote efficiency, transparency, and fairer financial practices.