According to the survey, the demand for credit has been pushed by the lower interest rates, consumer loans growth in the first two months of the year to fund education related needs.
Other factors included optimism by Micro Small and Medium Enterprises (MSMEs) about investing in manufacturing, health care, affordable housing food security popularly known as Big 4 Agenda and expected demand for loans by farmers in February to prepare for the long rains planting
“However, respondents indicated that most borrowers were still in the planning stage of their business goals, with execution expected to be in the second quarter and that lower loan approval rates by banks had slightly dampened the demand for credit with some clients resorting to mobile loans,” noted the survey issued in Nairobi.
According to the survey, the recovery in economic activity began with the opening of schools in the new year and was expected to accelerate as the year progressed, boosted by a stable macroeconomic environment, low oil prices and rebound in tourism.
Other factors included strong remittance inflows, a government led infrastructure development initiative, and an improving Purchasing Managers Index (PMI) which suggested an improvement in manufacturing activity.
Activities surrounding the government’s Big 4 agenda, were expected to create opportunities for businesses while flower exports were expected to peak in the next 2 months, noted the survey.